The proposal for crypto-based regulatory standards by International Organisation of Security Commissions (IOSCO), a platform around securities regulatory agencies, seems to have set the trend for global crypto regulations. It’s believed that these crypto standards will focus on systematisation of crypto-based investments, based on learnings from FTX debacle and fall in Terra stablecoin’s value.
According to Tech Monitor, a data-based insight and analysis company, IOSCO’s 18 recommendations around six fields such as market manipulation, retail customers, among others, aim to ensure investors’ security across crypto-based operations. The company further stated that this update has upheld importance of international regulators to manage global crypto markets. “I believe policy recommendations from IOSCO will strengthen efforts of global regulatory bodies to keep user protection at forefront of their regulations. IOSCO’s contribution to regulate development efforts by regulatory bodies might inspire their approach towards digital assets,” Rajagopal Menon, vice-president, WazirX, a cryptocurrency exchange, told FE Blockchain.
From what it’s understood, IOSCO’s Crypto-Asset Roadmap, unveiled in June, 2022, for FY 2022-23 played a key role in framing the crypto regulatory standards. Insights from the roadmap have highlighted IOSCO’s need to focus on crypto and digital assets (CDA), to be handled by UK Financial Conduct Authority (FCA), and decentralised finance (DeFi), to be managed by US Securities and Exchange Commission (SEC). According to Lim Tuang Lee, chairperson, IOSCO’s Board Fintech Task Force, crypto-asset service providers should ensure active accountability of their clients’ assets.
“IOSCO’s report is expected to prompt regulation of crypto assets. Implementation of the report’s recommendations is likely to stimulate investment in the crypto industry. The combination of regulation and investment is expected to drive adoption of crypto assets by consumers and businesses,” Punit Agarwal, founder, KoinX, a crypto-taxation platform, mentioned.
Moreover, IOSCO has unveiled a consultation report around the suggestions and is expected to keep it open for public comments until July 31, 2023. Experts believe that this step has increased the need for crypto-based regulations, considering European Parliament proposed EU rules for tracking crypto assets and related transactions last month. As per International Monetary Fund (IMF), global regulators intend to draft rules for stablecoin transactions and manage banks’ relations with crypto assets.
“The future of crypto should be influenced by an interplay of factors, including technological advancements, market dynamics, geopolitical considerations, and regulatory responses from various bodies such as IOSCO,” Pratik Gauri, founder and CEO, 5ire, a blockchain-based platform, concluded.
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