On 28 October 2021, the Financial Action Task Force (FATF) published updated guidance for a risk-based approach for virtual assets (VA) and virtual asset service providers (VASP). This guidance mentions how the FATF plans to closely monitor the VA and VASP sector for any material changes that necessitate further clarification of the FATF standards. This includes areas covered in this guidance such as, stablecoins, peer-to-peer transactions, non-fungible tokens and decentralised finance.

The update to the 2019 guidance reflects input from the public consultation in March-April 2021. It explains how the recommendations should apply to VA and VASP activities; provides relevant examples; identifies obstacles to applying mitigating measures; and offers potential solutions.

The guidance focuses on the following areas:

• Clarification of the definitions of VA and VASP.
• Guidance on how the FAFT Standards apply to stablecoins.
• Additional guidance on the risks and the tools available to countries to address the ML/TF risks for peer-to-peer transactions.
• Updated guidance on the licencing and registration of VASP’s.
• Additional guidance for the public and private sectors on the implementation of the ‘travel rule’.
• Principles of information-sharing and co-operation amongst VASP supervisors.