Cryptocurrency, when measured according to all global currency, is more than experiencing teething problems. There is over 100 billion USD worth of virtual currencies, but there’s an issue when it comes to being able to access commercial markets and traditional banking. While the cryptocurrency is attractive due to its decentralization, the primary concern that hinders the global market from taking part is lack of standardized regulation.
The primary concern for many parties is Anti Money Laundering (AML) and Counter-Terrorism Financing (CTF). While blockchain technology has changed how the globe transacts, it hasn’t always been used for the intended purposes. That has created a barrier between cryptocurrencies and the traditional financial and commercial sector. The dominance of the latter and its lack of engagement have led to lack of adoption of this potential future currency.
Countering AML and CTF are both a legal and moral obligation for any transaction. Lack of measures in place to stop such activities feeds illegal business, weapon and terrorists, human traffickers and drug dealers. It puts all market participants at risk. Legitimate crypto participants end up suffering because of the skepticism experienced by many about this type of economy. For this reason, companies that deal with value exchange via blockchain ought to ensure that they aren’t unknowingly or otherwise exposing themselves or playing a part in the facilitation of risky transfers.
Counterparty risk of blockchain is currently being mitigated by banks and payment transmitters. It’s mostly because accepting virtual currencies from unknown sources is a common occurrence. No one wants to put themselves, their companies or clients at such risk. The risk of association is high. When a party that you are dealing with has secret relationships with illegal sources, it is easy to become an accessory to unlawful transactions.
AML/CTF rules and regulations are yet to be solved on a global scale. Enforcement has shown to fail most of the time. It is relatively easy to exclude some countries by merely considering transaction from that particular region as high risk. For these reasons, the growth of virtual currencies is limited. For them to prosper, the same standards used on banks and financial institutions should apply. The system should, however, be democratic and data driven. Those in the ecosystem can participate and provide valuable input. That would make it better than the existing system.
How Coinfirm changes the environment
The difference between blockchain and traditional banking and financial system is transparency and inclusion. Coinfirm provides crypto participants with the democracy, transparency, compliance, and effectiveness required to operate safely and successfully in cryptocurrency. They aim to deliver a global standard for AML/CTF compliance that rates all transactions.
AMLT, the Coinfirm token, grants users access to the platform reports providing them with knowledge pertinent to evaluating market participants for safe trading. Both the Coinfirm and public get to highlight potential risks of transacting with a given entity.