While purists have for long championed the libertarian ideals that underpinned the creation of Bitcoin, the cryptocurrency industry is now facing a major new hurdle as global adoption continues at a rapid rate.
Last month Micky reported on new regulations for cryptocurrency exchanges recommended by the G20’s Financial Action Task Force (FATF).
The recommendations centre around requiring exchanges to collect more personal data and stripping back the anonymity cryptocurrencies arguably offer.
The Osaka summit you probably didn’t hear about
As the world’s most powerful politicians met in Osaka for the G20 Summit, right around the corner some of the most powerful cryptocurrency executives were taking part in a summit of their own.
The meeting was called the ‘Virtual Assets Service Providers Summit‘ or ‘V20’.
Among the biggest companies represented were Coinbase, Kraken, Huobi, Bitfinex, and Circle. Australian exchange Independent Reserve was also represented.
The main objective of the summit was to discuss how crypto exchanges can collect more of your data in order to comply with global laws.
The consensus: Data collection is ‘inevitable’
Futurist, Mark Pesce, was the chairman of the summit and today, in an interview with the ABC’s Radio National, he explained why most crypto exchanges now agree that confirming to global data collection requirements is the right way to go.
“Think of it in the old days, when people had numbered Swiss bank accounts, well you can’t do that anymore because the FATF basically told the Swiss that if you want to stay banking with the rest of the world they’re going to have to stop that,” said Pesce.
“So we’re going to see the same change come around with cryptocurrency exchanges where they’re going to have to collect this name and address information.”
The reason for the stringent regulations is because global authorities want to stop the financing of terrorist organisations, money laundering, and the funding of inhumane regimes.
By meeting these regulatory requirements, the crypto industry has the potential to link up with the traditional finance industry, potentially exposing millions more to Bitcoin and other cryptocurrencies.
“Cryptocurrency exchanges, they’ve all been basically playing pretty fast and loose, they haven’t been collecting this data, they’re going to need to collect it, they’re going to need to share it with one another, they’re going to need to share it with banks.”
The summit wrapped up on Saturday. Participants agreed to form a global industry body to asses how exchanges can universally meet international financial regulatory expectations.