Global securities watchdog IOSCO has rolled out the first international blueprint for regulating cryptocurrencies.
The organization’s standards, published Tuesday (May 23), deal with subjects like conflicts of interest and cross-border cooperation, and arrive at a time when governments worldwide are working to come up with crypto regulations.
“IOSCO has set out how clients should be protected and how crypto trading should meet the standards that apply in public markets,” the organization said in a news release.
Officials from IOSCO (the International Organization of Securities Commissions) say they hope the publication prompts regulators to be a bit bolder in their approach to digital assets.
“What we would say to jurisdictions is just push ahead,” IOSCO Secretary-General Martin Moloney said in an interview with the Financial Times.
“They’ve all got different legal frameworks, different regulatory frameworks. Just push ahead, do it to this standard as quickly as you can … It’s not helpful for anyone to hold back at this point.”
IOSCO said it saw the need to address concerns about the industry due to “recent market turmoil” in the sector “resulting in significant losses and risks to retail investors due to inadequate protections and safeguards.”
The release came weeks after lawmakers in Europe voted in favor of a crypto licensing framework, Markets in Crypto-Assets (MiCA), which, as PYMNTS wrote last month, sets the state for the introduction of tailored regulations for the crypto industry.
“This puts the EU at the forefront of the token economy,” said Stefan Berger, lead MEP for the MiCA regulation. “Consumers will be protected against deception and fraud, and the sector that was damaged by the FTX collapse can regain trust.”
Berger added that the regulation gives Europe a competitive advantage, as its crypto sector now “has regulatory clarity that does not exist in countries like the U.S.”
As covered here in recent weeks, that apparent lack of clarity has led some companies in the crypto sector to consider doing business elsewhere.
For example, Coinbase — currently in a battle with the U.S. Securities and Exchange Commission (SEC) — has criticized what it says is the country’s lack of action on crypto regulation compared to areas like Hong Kong, Europe and the Middle East.
Meanwhile, American lawmakers last week unveiled two competing bills governing stablecoins, one introduced by House Financial Services Committee Chairman Patrick McHenry (R-N.C.) as well as another put forth by committee Ranking Member Maxine Waters (D-Calif.).
As PYMNTS wrote, McHenry’s legislation puts more regulatory power at the state level, and says that state-qualified issuers who submit all required registration materials will be officially registered within 60 days of submission.
In Waters’ proposal, the Federal Reserve would get the power to decline state-qualified payment stablecoins from registering on a federal level.
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