The situation has not changed that much, and even these days, criminals are still limited when it comes to spending money in its crypto form. However, large cash-outs by bad actors can be troubling for the crypto industry itself, as it can start a bearish trend that could, once again, crash the crypto market.
All of this is something that might change soon, as Visa plans to start offering crypto-funded debit cards. Visa is, by no means, original when it comes to the idea. There were many others that attempted to bring crypto credit and debit cards in the past, but their efforts resulted in failure as they could not comply with regulations.
In Visa’s case, however, things appear to be different. The company’s recent cooperation with Coinbase seems to be directed at bringing a UK crypto card, which will allow users to spend their money directly from wallets. What’s more — they will be able to do so at any location where Visa cards are accepted, which at this point includes pretty much the entire world.
Not only that, but the card’s spending limit is expected to start at £10,000 per month, and grow to £20,000 for certain users.
Of course, all of this still requires answers to a few questions, such as — how did Coinbase go about satisfying KYC and AML regulations? There is no doubt that the regulatory environment regarding digital currencies is evolving — and has been for quite a while. Even some wallets managed to find a way to satisfy regulations and comply with the rules, which brought support from the regulators. They are still in the minority, of course, and criminals can still use most wallets without oversight, but the situation does appear to be changing for the better, in this regard.
Even so, with the majority of wallets still not being compliant with regulations, anyone who uses Coinbase could potentially get a payment from illegal sources with nothing to stop them, and with no punishment. But, Visa points out that Coinbase is regulated by the US authorities, and that the partnership between the two is subjected to enhanced scrutiny.
Coinbase itself fights against the issue by blocking accounts that are involved with suspicious activities. However, that would still require that the company notices suspicious activities in the first place. The nature of cryptocurrencies is the real issue here, as even if all exchanges and wallets implement KYC procedures, cryptos still remain mostly anonymous. The only real way of preventing illegal transactions would be to block payments that come from unregulated wallet accounts. However, this would go against everything cryptocurrencies stand for, not to mention that it would come at huge costs.
Additionally, even real, traditional banks have seen such issues, as there are many of them in countries with less strict regulations that might not be compliant with regulations. If the banks have found this issue too difficult and expensive to deal with, how can the crypto industry deal with it?
Crypto institutions will have to find a way to become compliant with regulations if they wish for Visa’s plan to become a reality. Otherwise, the last several decades of the fight against financial crime would simply be erased, and major consequences could come as a result.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
The post Can Crypto Credit Cards Disrupt the Fight Against Financial Crime? appeared first on Global Coin Report.
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