Abu Dhabi, UAEWednesday 21 August 2019

Japan leads global push for cryptocurrency pay network

Effort to fight money laundering may see deployment of international system similar to the SWIFT network used by banks

Tokyo driving push to ensure the security of virtual currencies such as Bitcoin. Reuters.
Tokyo driving push to ensure the security of virtual currencies such as Bitcoin. Reuters.

Japan’s government is leading a global push to set up an international network for cryptocurrency payments, similar to the SWIFT network used by banks, in an effort to fight money laundering, a source said on Thursday.

Tokyo aims to have the network in place in the next few years, the source said. A team related to the inter-governmental Financial Action Task Force (FATF) will monitor its development and Japan will cooperate with other countries, according to the source.

It remains unclear how the cryptocurrency network would work. SWIFT is the international payments messaging system used by banks to send money around the world.

FATF in June approved the plan for establishing the new network, which was proposed by Japan’s Ministry of Finance and the Financial Services Agency (FSA) regulator, according to the person.

Both the FSA and the Ministry of Finance declined to comment.

Tokyo has pushed to ensure the security of virtual currencies, hoping to leverage the financial technology industry to stimulate economic growth. Japan became the first country in the world to regulate cryptocurrency exchanges at a national level, in 2017.

It remains unclear whether the network would meet resistance from users, given that the attraction of cryptocurrencies is, in part, in their unregulated nature. That lack of regulation is precisely what worries governments and central bankers.

Facebook’s recent announcement of plans to launch a digital coin has met with a chorus from regulators, central banks and governments insisting the tech giant must respect anti money-laundering rules and ensure the security of transactions and user data.

Digital currencies are also likely to be a topic at the G7 finance ministers meeting in France this week.

Updated: July 18, 2019 09:00 AM

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