The International Digital Asset Exchange Association (IDAXA) last week announced the release of the OpenVASP protocol, a framework that is expected to lead the industry to comply with regulatory standards set forth by the Financial Action Task Force (FATF).
Coinfomania interviewed Ronald M. Tucker, Director of IDAXA, to get more insights regarding the journey towards meeting regulatory standards, the progress achieved so far by IDAXA, and why the presence of regulation can only bode well for the industry.
How Was the Idea for IDAXA Conceived and What’s the Progress So Far?
The International Digital Asset Exchange Association, IDAXA for short, is an international organization representing the interest of virtual asset service providers (VASPs).
The Association was formed in response to the release of the FATF guidelines and is a mandate of several industry associations across various jurisdictions.
The Global Blockchain Forum (GBF), which was formed in 2015 and currently has 15 member countries grew into IDAXA earlier this year as the organizers sought to use a properly registered and recognized body while engaging with regulators.
Twenty crypto exchanges, including Coinbase, Kraken, Bitfinex, Circle, and Huobi, attended the V20 summit, which led up to the formation of IDAXA by the six represented industry associations.
So far, the three significant achievements following the summit, according to Ronald Tucker includes, the Memorandum of Understanding (MoU) signed to form IDAXA, the creation of IDAXA as a company limited by guarantee and a non-profit organization, and the recent release of the OpenVASP protocol.
The FATF and the Crypto Industry
To better understand the role of IDAXA, recall that it was in June, that FATF mandated virtual asset services providers (VASPs), mainly crypto exchanges, to share beneficiary and sender information when the transactions pass through their platform.
Meeting that requirement, otherwise known as the ‘travel rule’ would require the existence of a global system similar to what SWIFT does for the global banks, as Ronald Tucker explained in the interview.
In April, the industry comprising 45 different companies represented by member associations met in Vienna at the United Nations met with the FATF for private industry consultation. The result was these companies reconvening in a June summit following the G20’s adoption of the FATF guidelines to agree on how to meet the regulatory guidelines.
Does Regulation Harm or Hurt Crypto Adoption?
“Regulators are a key part of every industry,” Ronald said on the matter of whether the intervention of regulators does not betray the basic concept of cryptocurrency and blockchain technology.
He further compared the crypto revolution with what has happened; the media moving on to the internet and the evolution of the taxi industry to Uber and hotel to Airbnb.
One reason [financial] crime regulators are there is to help protect consumers and mitigate financial crime. And it is an obligation that we as a mature industry need to take seriously, not only, because it is good for consumers and its good for society as a whole to stamp out financial crime.
Ronald also shared his thoughts on the fact that the proposed regulations impact the bottom line of the involved businesses and consumers.
For every breach, or hack or fraudulent transaction that takes place online. [….] Many of these best practices that are being insisted upon by the regulators are the learnings that come from the traditional sector. Our industry is wise to take those lessons and apply them essentially for our own interests.
By working with regulators, he believes that the industry is a better position to get their desired outcomes since “nobody wants to see financial crimes impact their business.”
At the end, when the industry becomes well regulated, there will be a more “quick-take of cryptocurrencies and the mitigation of financial crimes.”
Regulation Doesn’t Betray The Decentralization Concept of Crypto
While the ordinary crypto user believes that regulation goes against the decentralized and censorship-resistant principle of bitcoin and blockchain, Ronald thinks otherwise.
“FATF guidelines mean that our industry needs to work quickly, efficiently, and effectively as a unified voice regardless of jurisdiction or border, very much in the spirit in which crypto and blockchain exists,” he told Coinfomania correspondent Wilfred Michael.
He also believes that a failure to comply with regulators will adversely affect exchanges and potential take the industry five-ten years backward.
Rather than suffer such fate, he argued that a better approach is to work with regulators and expedite the growth of the industry since the G20’s adoption of the FATF guideline means that ‘bitcoin is now officially part of the world’s financial services system.’
Article Wilfred Michael – Source Coinfomania