Key facts:
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The convertibility of BTC to dollars in the financial system does not exceed 0.03% of the total volume.
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For GAFILAT, El Salvador still does not understand “the risks to which it is exposed with Bitcoin.”
After carrying out an assessment in Salvadoran territory, the Financial Action Task Force of Latin America (GAFILAT) observes that the adoption of bitcoin (BTC) does not represent any risk for the country’s financial system.
With this statement, the organization, which is an extension of the FATF in the region, concludes an extensive report in which it presents the results of a study carried out in El Salvador in order to evaluate its actions to prevent money laundering and the financing of terrorism (LA/FT). This, within the framework of the use of BTC as legal tender.
The report reviewed compliance with the 40 FATF recommendations, including the so-called Travel Rulemaking a complete analysis of the functioning of the Salvadoran Cryptocurrency ecosystem.
As GAFILAT points out, the study was based on information provided by the country, along with data obtained by an evaluation team who visited El Salvador earlier this year.
They thus determined that the adoption of the currency created by Satoshi Nakamoto “has not had a significant impact” on the country’s economy, proving that there is a low level of use among the population.
According to the organization’s observations, during the period of its visit, the Salvadoran financial system converted a number of bitcoins into dollars. equivalent to USD 6.6 million. A figure indicative of a low volume of transactions, taking into account that represents a ratio of 0.03% compared to the more than USD 17,639 million managed by the 12 largest banks in the Salvadoran market.
“Transactions executed in bitcoin by the Salvadoran population are limited and there is a significant preference among customers for the use of the dollar,” says GAFILAT.
These convertibility operations in the financial system are associated with loan payments, collectors, credit cards, deposits and premium payments, the GAFILAT report points out, which also states that the flow of remittances through cryptocurrency wallets is less than 1%.
Few vulnerabilities detected, but bitcoin is still under surveillance
In its report on El Salvador, GAFILAT points out what it calls “some vulnerabilities,” indicating that the greatest risk detected is related to exchanges that involve BTC with other cryptocurrencies that are not regulated in the country.
Although the country has made significant efforts in the risk analysis applicable to bitcoin, no ML/TF risk level has been established for virtual assets in general, although there does not seem to be an understanding of the risks to which the country is exposed.
GAFILAT report for El Salvador.
At this point, the international organization confirms that the Central Bank (BCR) has a record of 106 bitcoin service providers (PSB), while the National Digital Assets Commission (CNAD) reports 16 digital asset service providers (PSAD).
Although it cites some minor flaws in supervision, in general, GAFILAT certifies the proper compliance of measures by cryptocurrency exchanges operating in El Salvador.
It specifically mentions, as part of compliance, the application of limits to the automatic convertibility of bitcoins to dollars so that transactions do not exceed USD 200,000. “Alert signals” are also implemented in operations to notify authorities.
As CriptoNoticias has reported, the interest of the Nayib Bukele government in complying with the FATF standards has led it to propose several reforms to the Digital Assets Act, which was passed last year. The changes are made to add more measures anti-money laundering in the services offered with bitcoin.
However, GAFILAT insists that have bitcoin as currency remains a risk for the country, reiterating the idea that digital currency is closely linked to illicit operations.
For this reason, he believes that in El Salvador “they still do not understand the risks that digital currency implies.” This, despite the fact that most of the studies carried out on the subject indicate that the use of cryptocurrencies in crimes is at very low levels.
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