The Japanese government has started developing a crypto payments platform similar to SWIFT according to reports. The effort has come as part of a wider spread initiative to combat money laundering.
SWIFT Not So Swift
According to Reuters, citing ‘a person familiar with the plan’, the international network for crypto currency payments will rival SWIFT which is the current standard. The existing service links over 11,000 financial institutions in more than 200 countries and territories worldwide.
However, in today’s modern times, the Belgian head-quartered financial transfer protocol is often considered antiquated and expensive. As a result Japan has joined the likes of Ripple in developing an alternative.
The report added that Tokyo plans to have the network in operation within the few years. Japan will co-ordinate with other nations via the international Financial Action Task Force (FATF) which approved the plan for the new network last month. The G7-initiated intergovernmental organization promotes legal, and regulatory measures to fight money laundering on a global scale.
Japan’s Ministry of Finance and the Financial Services Agency (FSA) proposed the platform as a further effort to secure the transfer of digital assets and help to stimulate its fintech industry.
The east Asian island nation was the first to recognize Bitcoin as legal tender in 2017. It also implemented crypto regulation in the same year and was one of the first countries to officially open its doors to digital assets.
Cryptocurrencies are still in themselves largely unregulated although the exchanges are, and there is concern that consumers will still favor the former over a state controlled transaction system.
Facebook Crypto Concerns Climbing
The news comes just days after the US Treasury Secretary cited illicit activity and money laundering as the curses of crypto currency. Japan could also be joining the growing number of countries concerned about Facebook’s proposed foray into global finance.
The social media giant has certainly rattled a few regulatory cages recently with its ambitions to control user’s financial transactions on a scale similar to its manipulation of their information. Nations of the world are growing wary of a US tech giant backed by a bunch of other US tech giants controlling a dollar backed crypto currency with a potential market of 2 billion people.
The development of an alternative crypto transfer protocol maybe Japan’s effort at safeguarding its own financial economy from outside threats, which Facebook clearly is. Other nations in Asia such as India, China, Russia, and Thailand have also mulled their own central bank based crypto assets to maintain and control of the flow of money across their borders.
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