More than a dozen years after bitcoin was introduced, securities regulators are discussing global standards for cryptocurrency, The Financial Times reported.
Given the explosive growth of the sector, the Financial Stability Board (FSB), the Switzerland-based international body that monitors global financial system, warned stability risks could escalate rapidly.
“Anything that is growing and not regulated can cause enormous problems if we don’t get to grips with it,” Mairead McGuinness, the commissioner for financial services, financial stability and capital markets at the European Commission said at a recent event held by the publication.
In her remarks, McGuiness said young consumers are investing in crypto for fun and getting financial advice from TikTok, a popular video sharing platform.
“The collective activities are alarming if they’re not regulated, and this is why there is a global need for principles around the whole crypto space,” she added.
Cryptocurrency trading companies are typically decentralized businesses spread across the globe, highlighting the need for a global approach to policing them, McGuiness said.
Mark Steward, a tech specialist at the FSB, told attendees there are cryptocurrency businesses that appear to be everywhere and yet physically nowhere.
“That’s a real red flag for everyone, and it’s something that should concern regulators all over the world,” he said.
In an interview with PYMNTS, Kevin Werbach, professor of legal studies and business ethics at The Wharton School of the University of Pennsylvania, said regulating crypto assets is inevitable and lawmakers on Capitol Hill are demonstrating increased interest as their level of sophistication is rising.
See also: Crypto Regulation Discussions in Congress Are Becoming More Sophisticated
Ashley Alder, CEO of Hong Kong’s Securities and Futures Commission, said coordination between domestic and international regulators is key.
He called on regulators to explore an integrated approach to virtual asset activities, and to reduce regulatory arbitrage, the simultaneous purchase and sale of the same asset in different markets to profit from tiny differences in the list price.
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