The Financial Action Task Force’s assessment notes that the use of bitcoin is limited, despite the fact that there are more than 100 service providers on the market.
Financial system converted bitcoins equivalent to $6.6 million, revealedevaluationof the Financial Action Group of Latin America (GAFILAT), published on Friday, which reaffirms that theadoption of the cryptocurrencyIt didn’t have a significant impact.
The report reviews compliance with the 40 FATF recommendations, related to the fight and prevention of money-laundering, the financing of terrorism and the proliferation of weapons of destruction. The evaluation contemplated an on-site visit between January 8 and 19, 2024, as well as a revision to the bitcoin ecosystem since El Salvador was the first country to legally adopt the cryptocurrency.
GAFILAT notes that during the period evaluated it was detected that the financial system served transactions of convertibility of bitcoins to dollars for about $6.6 million, a ratio of 0.03 percent compared to the more than $17,639 million managed by the 12 large banks of the Salvadoran square.
The report confirms statements issued last March by senior managers of Bancoagriícola, the largest on the market and with more than 1.6 million customers, who assured that the flow ofoperations with the cryptocurrency is marginaland is not among the main banking services.
Convertibility transactions in the financial system are associated with loan payments, collectors, credit cards, deposits and premium payments, says the GAFILAT report, which also states that the flow of remittances through cryptocurrency wallets is less than 1 per cent.
The most recent data published by the Central Reserve Bank (BCR) reveals that Salvadorans abroad sent $49.7 million in remittances through digital wallets, 6.3 per cent lower than in the same period of 2023. This is equivalent to 1 percent of the more than $4,756.3 million household received in the first seven months of the year.
Through the report, GAFILAT notes that banks have applied thresholds that do not exceed $200,000 in automatic convertibility transactions from bitcoins to dollars. They also implement warning signs in operations to notify the authorities.
Between 2019 and 2023, the Superintendency of the Financial System (SSF) carried out 644 risk-based monitoring, mainly to suppliers of bitcoin services, private banks and insurance banks.
With the adoption of bitcoin, in September 2021, the government created a convertibility trust that was administered by the Development Bank of El Salvador (Bandesal), but the information is availablelow reservationIt is therefore unknown how much it has become in the three years of operation.
Monitoring
At the time of the report, the BCR retained 106 bitcoin service providers (PSB) and the National Digital Assets Commission (CNAD) in its register, reported 16 digital asset service providers (PSAD).
These providers offer dedicated services, digital wallets, exchange houses, processors and payment walkways to ATMs.
GAFILAT confirmed that the service most requested by Salvadorans corresponds to payment gateways, but the transactional volume is limited and the preference for the use of the dollar is maintained.
In the analysis, GAFILAT noted that the greatest risk occurs in digital asset exchange houses, which may be a digital asset that is not regulated in El Salvador.
The SSF has detected 223 weaknesses in the monitoring processes of bitcoin service providers, of which 64 have been remedied and 11 are in the process of being sanctioned.
No formal monitoring processes have been initiated for digital asset service platforms, although 58 requests for revisions have been made. The authorities denied five registration processes and rejected four others for processing due to deficiencies in the documentation, the report adds.
This article has been translated after first appearing in Diario El Mundo