FATF publishes guidance on Global Digital IDs

posted 9 months ago
The Financial Action Task Force (FATF) published guidance on digital identity for governments, regulated entities and other stakeholders to enforce anti-money laundering (AML) and counter financing terrorism (CFT) regulations. The guidance specifically lists distributed ledger technology (DLT) as a tool that can aid in the growth of digital ID networks. A number of blockchain companies have already set their eyes on this particular area, such as Civic.

The FATF called on authorities to “develop clear guidelines or regulations allowing the appropriate, risk-based use of reliable, independent digital ID systems by entities regulated for AML/CFT purposes. FATF suggests regulated institutions, such as cryptocurrency exchanges (referred to as virtual asset service providers, or VASPs), “take an informed risk-based approach to relying on digital ID systems for Customer Due Diligence.” The 77-page draft guidance details many issues related to digital ID systems such as how they might be used in performing customer due diligence.
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