The SWIFT Institute, an organisation founded in April 2012 which receives funding and secretariat services from global giant SWIFT, is calling for proposals for research into the risks – money laundering, terrorist financing, gambling, fraud and phishing – third party payment providers using virtual currencies such as Bitcoin face. The selected proposal will be awarded a EUR 15,000 grant with completed research and a working paper to be submitted by August 2015.
The SWIFT Institute hopes the research will address the following questions:
- What is the status of the global third-party payments industry? Who are the players? What are the differing types of players? What technologies are used to facilitate third-party payments, whether independently or in cooperation with banks (e.g. mobile, NFC, distributed ledger, etc.)?
- What role does the third-party payments industry play in the development of a country’s e-commerce and macro-economy? What is its position in the overall global economy?
- What are the risks of money laundering and terrorist financing in the third-party payment industry? What measures already exist to mitigate these risks?
- What is the role of regulation in the third-party payments industry? What legislation exists to mitigate the risks of money laundering and terrorist financing in the industry and what are the shortfalls? How do / should regulators coordinate with each other to provide effective regulation across borders? How can third-party payment providers comply with regulations that may differ from one country to another?
- From an emerging economy like China where third-party payments are proliferating, what lessons can be learned relating to AML / CFT?
- What non-legislative measures exist to help strengthen the AML / CFT capabilities of third-party payment providers? What is still required? What role, if any, does business intelligence based on big data and cloud computing have?
The call for proposals also made a subtle reference to Charlie Shrem's imminent imprisonment, saying:
The fast development of third-party payments has greatly facilitated business and improved quality of livelihood, thereby helping to boost overall development of the economy. Regulatory requirements relating to third-party payment providers, however, have been slower to develop. Providers in this space are not (usually) deemed to be banks, and are therefore not subject to full banking regulations. Changes are being seen, however, such as the recent proposal in the United States by the CSBS (Conference of State Bank Supervisors) of a regulatory framework for virtual currency activities. A prison sentence was also recently handed out to a former Bitcoin Foundation board member for involvement in an unlicensed money transmitting business.
The full document is available here.