The Stellar Development Foundation responds to FATF's draft guidance on virtual assets and VASPs, arguing the proposal lacks evidence, threatens financial inclusion, and represents regulatory turf-protection rather than genuine financial crime prevention.
The Stellar Development Foundation published a detailed response to the Financial Action Task Force's March 2021 draft guidance on virtual assets and Virtual Asset Service Providers (VASPs). SDF argues the proposal dramatically expands regulatory scope without concrete evidence, noting that virtual asset use in illicit finance represents only 0.34% of transactions, far lower than fiat currency crime rates. The foundation contends FATF's approach prioritizes preserving the centralized intermediary model over embracing decentralized technology's potential to serve financially excluded populations. SDF highlights a contradiction in FATF's position: while studying de-risking harms through its own standards, FATF simultaneously proposes rules that would trigger another wave of de-risking. SDF calls on FATF to reexamine the proposal through a financial inclusion lens and collaborate with blockchain experts on more informed policy.
