Cryptocurrency could pose financial integrity risks sans careful assessment: IMF
Palau must take careful assessment on any cryptocurrency-related plans as these might pose “significant financial integrity risks”, according to the International Monetary Fund (IMF) 2018 Article IV Mission report.
Ms. Yuko Kinoshita, Deputy Division Chief of the Asia and Pacific Department of the IMF, told the media that there is a need for Palau to strengthen measures against financial crimes such as money laundering and financing of terrorism if it is to embrace cryptocurrency.
“You do need a lot of preparation before you consider getting into this. There is a pros and cons in taking such a new asset,” Kinoshita said.
“The team encourages the authorities to continue to improve anti-money laundering and combating the financing of terrorism (AML/CFT) regime. The recent assessment in the Financial Action Task Force (FATF) standards highlights a number of areas for improvements in the AML/CFT framework,” Kinoshita said, explaining further that since money laundering risks in the country originated from foreign financial flows rather than locally, more cooperation and information exchange is necessary to be established with foreign jurisdictions.
Interest on cryptocurrency in Palau has sparked discussions among locals after previous report stated that the House of Delegates was considering a legislation relating to cryptocurrency and blockchain technology.
Finance Minister Elbuchel Sadang was also previously quoted in a report, saying that Palau is still apprehensive about cryptocurrency and the lack of education about it. He also cited that there is no legislation in place that could support the technology. (Rhealyn C. Pojas)