Japan Seeks to Develop SWIFT Payment Equivalent for Cryptocurrencies
Japan’s government is working on the creation of a new international network for payments based on cryptocurrencies in order to fight money laundering inside the region, according to an article posted July 18, 2019 by Reuters. The network would be an alternative to the SWIFT Network used commonly by financial institutions.
Crypto Alternative to SWIFT
The government of Japan wants to create an international network for cryptocurrency payments to try to reduce money laundering within the nation. The solution would be very similar to the SWIFT Network used by banks that enables to send and receive information about financial transactions worldwide.
The news was leaked thanks to an anonymous informant, declining to be identified because the information has still not been made public. He also specified that the development of the solution is being monitored by a team related to the inter-governmental Financial Action Task Force (FATF).
There are still no details on how the network would work but, according to the person, the new network has been approved by FATF in June following a proposal made by Japan’s Ministry of Finance and the Financial Services Agency (FSA) regulator. However, no confirmation of this can be found, though no denials have been put forward yet from the institutions in question.
Japan has the world’s most progressive regulatory climate for cryptocurrencies and, as of April 2017, recognizes Bitcoin and other digital currencies as legal property under the Payment Services Act.
Japan is trying to create an ideal environment for the development of blockchain technologies hoping to leverage the fintech industry to stimulate economic growth.
However, even if such a service were to be implemented, it is necessary to see how many people would actually use it. The attraction of cryptocurrencies is, in part, in their unregulated nature and a government crypto payment network doesn’t sound ideal for crypto users.
The nature of blockchain transactions recorded on a public ledger is what makes cryptocurrencies a potentially interesting tool for law enforcement agencies to prevent money laundering practices. These are things that traditional banking system is not allowed to, and can’t possibly do.
This is what interests all governments and international banks. As discussed on BTCManager, June 24, the Financial Action Task Force (FATF) prepared guidelines to strengthen control over crypto exchanges to preclude digital currencies from being used in money laundering and related financial crimes.