G7 approves Japan’s answer to SWIFT

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According to Cointelegraph the Japanese government is attempting to spearhead the creation of a new, global cryptocurrency payments network that would be similar to SWIFT, the system used by banks to make payment transfers.

Reuters reported that an anonymous source told them “the country’s push for the network is motivated by a resolve to combat money laundering more effectively.”

Japan’s Ministry of Finance and its national regulator, the Financial Services Agency (FSA) initially proposed the plans for the network, but these are being kept secret for now. However, the source said that Tokyo hopes to have the network established within the next few years.

The Financial Action Task Force (FATF) — a G7-initiated intergovernmental organisation that promotes legal, regulatory and operational measures that aim to fight money laundering on a global scale — has approved the network for oversight.

Reuters also noted that this has come at a time when “anti-money-laundering (AML) compliance has loomed large in regulators’, central banks’ and governments’ scrutiny of Facebook’s plans to launch its own Libra stablecoin.

G7 is meeting in France this week and Japan set up a national liaison conference — involving the Bank of Japan, the Ministry of Finance and the FSA ahead of this, focusing on the impact of Libra on monetary policy and financial stability. However, France had already pre-empted Japan by creating a G7 taskforce that will examine how central banks can regulate cryptocurrencies like Libra. In June the FATF unveiled plans to strengthen control over crypto exchanges to preclude digital currencies from being used in money laundering and related financial crimes.

Japan has also been updating its regulations. In spring, the Japanese House of Representatives officially approved a new bill to amend national laws that govern crypto regulation. The revised acts — which include specific AML measures focused on privacy coins — are set to come into force in April 2020.

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