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Threat or need? Venezuelan expert weighs in on FATF guide to regulate bitcoin

“Great guidelines that companies related to the cryptocurrency market must observe if they truly want to last in the ecosystem.” That is the vision of the Venezuelan economist, CEO of Olmos Group, Aarón Olmos, on the recent FATF guide to regulate bitcoin (BTC) and other crypto assets.

In an exclusive interview with CriptoNoticias , also a university professor at the Institute of Higher Administration Studies (IESA) in Caracas, considered that the recommendations made by the International Financial Action Group (GAFI) to legally frame the cryptocurrency market, respond to the incursion of digital assets to a business and government environment, that necessarily deserves regulation.

Right now, virtual asset service providers (PSAV) are acting as digital data intermediaries that represent very important volumes of money.

And, as if that were not enough, are coming out of the traditional market of them, the peer-to-peer (P2P), and they are entering a space or “where there is much more money” and where “necessarily has to come a control, a regulation by the regulatory entities.”

Somehow , companies, developers, creators, users, must understand that as the world and crypto assets leave the P2P market and become a space for the development of supply and demand for companies and governments, regulations must necessarily come.

Aarón Olmos, economist expert in cryptocurrencies.

But these regulations, he clarifies, have to emanate, initially, from the national control entities, that are aware of the volumes that are handled in equivalent fiat money to cryptocurrencies on these platforms.

The FATF, a highly relevant international institution that advises governments on financial matters, published last week the update of its regulatory guide. ation of cryptocurrencies, where strict recommendations are reflected to try to control the market.

One of them is, for example, that exchanges present equivalent to reports of monetary transactions ( such as a bank statement ) or even a record-keeping rule related to those transfers, as part of the actions that – according to the FATF – They serve to mitigate the risks of crimes linked to money laundering, terrorist financing and others.

PSAVs are acting as digital data intermediaries representing very important volumes
amounts of money. Source: AUTHOR NAME / pixabay.com

They left behind the precept of Satoshi Nakamoto

Olmos recalled that the largest companies linked to the ecosystem, such as Binance, LocalBitcoins, Coinbase and others, moved away from the «original cryptoanarchist vision» of Bitcoin, based on the fact of privacy, pseudo anonymity and the right to have operations without a trusted third party involved.

The issue, he insists, is that they changed, but in order to last in the ecosystem, the which remains in constant expansion and growth.

At the end of the day, many companies that were born with a crypto vision arquista of decentralization, designed for individuals, with the passage of time and market growth they stopped being that and have become large technological-financial companies. Some of them have applied for licenses to become banks. Many companies abandoned these precepts, on the understanding that we have a deformation of the original idea of ​​Satoshi Nakamoto.

Aarón Olmos, economist expert in cryptocurrencies.

It also suggests that these companies are on the side of para-financial and para-bank activities, because there are technology companies that are not banks “and move more money than a bank.” “Necessarily in governments and countries, their legislation will be focused on controlling and regulating,” he pointed out.

Companies have to collaborate in the development of standards

Elms He warned of the risk that the authorities of each country advance in the regulation of the ecosystem without prior knowledge. In his opinion, the market may disappear with the wrong measures.

«If the regulators want to impose rules on the crypto world and do not know what it is about, the most probable thing is that they will end up generating a legal document that, far from shaping it and helping the market grow, will constricts it, reduces it and practically disappears it, “he says.

In fact, in Argentina a bill that sought to regulate to bitcoin, presented by the deputy of the Frente de Todos Liliana Schwindt, which was cataloged as “stupid” and as a legislation “without feet or head” by the CEO of the firm Signatura, as recorded by CriptoNoticias.

Precisely for this reason, Olmos calls those who make up the ecosystem, such as users and other companies linked to cryptocurrencies, to open up to recommendations such as those of the FATF « since they are entering a world of companies and governments, leaving the P2P world ».

Companies that want to survive in the cryptocurrency market must observe the FATF recommendations and, at the same time, observe and join the possibility of participating in the development of rules and regulations to help shape the market correctly.

Aarón Olmos, economist expert in cryptocurrencies.

Aarón Olmos, CEO of Olmos Group and expert in cryptocurrencies. Source: Aaron Olmos / about.me

Are the recommendations then a danger?

According to Aarón Olmos, no. They are simple propositions of a multinational organization (of weight) towards the countries. The problem, he says, lies with the governments.

“The real danger is the governments of the countries, especially due to the ignorance of the activity they intend to regulate and regulate,” he said. And he reiterated that for this reason, “many technology companies have understood that in order to maintain themselves, they must play the same bureaucratic game.”

“When you abandon the logic of a network of acquaintances and go to large companies and governments, you put yourself in the public view of the supervisory bodies », he stated.

Migration to the DEX?

We consulted Olmos about a possible migration to decentralized exchanges (DEX), such as Bisq or Uniswap, based on the restrictive recommendations of the FATF. He said yes, although he sees inevitable that regulation ends up reaching these types of markets. In fact, it has already happened: the case of Aave, the open source protocol that in May was launched for testing a centralized «DeFi» for institutions, aligned with FATF regulations.

There could be a platform migration process, however , sooner rather than later, the governments of the countries, financial entities, central banks, controllers, multilateral entities; They will also reach the DEX requesting information, data verification, risk-based approaches; because many of these platforms do not complement these elements.

Aarón Olmos, economist expert in cryptocurrencies.

He insists that while decentralization is the nature “and the glory” of the cryptocurrency market , “that it was when we were under the anarchist logic of a P2P network of natural persons ».

Even, it warns that, little by little, it is seen that exchanges with some different or rebellious vision, are beginning to disappear , since they have not been located within the general line assumed by the vast majority of companies: adapt to regulation.

A desire to centralize freedom

The FATF, the body that has insisted with all its might in trying to control ab itcoin, returns to make “recommendations” that highlight the desire to centralize something that was born free.

It is true that the FATF does not have a voice or vote in the nations, but a country that does not consider its measures, will be submitting to international isolation. For this reason, joint work between governments and representatives of the cryptocurrency industry is imperative, with the aim of achieving coexistence between ecosystems.

If there will be a massive adoption or not at the institutional level in the future, it is difficult to predict, but the experiences registered to date suggest a bright future, of interconnection between companies and these assets, without talking about intrapersonal trade.

Hence, a clear, non-invasive or interventional regulation will also have to be denoted, that allows the free development and consequent expansion of the market.

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Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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