Financial Crime World

Guinea Grapples with Digital Currency and Financial Crime: Traditional Institutions Must Adapt to Stay Ahead

In a country where financial crimes are on the rise, Guinea’s traditional institutions must adapt to the growing demand for digital currency services.

The Growing Demand for Digital Assets

According to recent research, 28% of consumers in Guinea are interested in having digital assets as part of their banking relationship. This growing demand is forcing traditional financial institutions to choose between embracing the digital asset train or risk losing market share.

Regulatory Uncertainty

Despite regulatory uncertainty, traditional financial institutions must prioritize identifying and understanding the key threats, vulnerabilities, and illicit financing risks related to virtual assets.

Key Threats and Vulnerabilities

  • Partnering with Virtual Asset Service Providers (VASPs) can indirectly expose a financial institution to facilitating suspicious transactions through their institution.
  • Lack of effective risk management and AML/CFT controls in VASPs.

Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Measures

The Financial Action Task Force (FATF) has issued guidance on virtual assets, outlining anti-money laundering and combating the financing of terrorism measures that can be applied when partnering with VASPs. Traditional financial institutions must:

Conduct Counterparty Due Diligence

  • Confirm whether a VASP has performed a thorough risk assessment of its AML/CFT program
  • Perform a risk assessment of their own to understand factors such as:
    • Size and structure
    • Ownership
    • Products and services
    • Geography
    • Channels

Creating Long-Lasting Business Relationships

By performing the appropriate levels of customer due diligence, traditional financial institutions can create long-lasting business relationships while addressing compliance with evolving regulatory expectations.

Staying Vigilant in a Growing Digital Assets Market

As Guinea’s digital assets market continues to grow, financial institutions must remain vigilant in their efforts to meet customer demand without compromising the integrity of their AML/CFT programs.