Cryptocurrency

Global securities watchdog urges governments to regulate crypto like traditional financial assets

The International Organization of Securities Commissions (IOSCO) statement They argue today that cryptocurrencies are so similar in nature that they should be treated in the same way as traditional financial assets such as stocks and bonds.

The global watchdog has included its position among 18 key recommendations for countries to help them develop or adapt regulatory policies for the cryptocurrency industry.

However, the watchdog’s position contradicts British politicians who have called for cryptocurrency trading to be regulated in the same way as high-risk industries such as gambling.

Recommendation

IOSCO’s standards mainly cover conflicts of interest, market manipulation, cross-border regulatory cooperation, custody of crypto-assets, operational risks, and dealing with technical risks. The watchdog also commented on rights owed to individual investors, such as access, suitability and distribution.

IOSCO said regulators should work on cryptocurrencies within existing frameworks wherever possible, and develop new ones if current systems are inadequate. The framework should cover “crypto-asset trading, other crypto-asset services, crypto-asset issuance, marketing and sale.”

According to the documentation:

“Regulatory approaches should aim to achieve regulatory outcomes that are the same or consistent with those required in traditional financial markets in terms of investor protection and market integrity.”

IOSCO also said that cryptocurrency companies often operate across multiple jurisdictions, requiring regulators to take a consistent global approach to the area.

The watchdog called on regulators to “go beyond enforcement and consider bilateral/multilateral cooperation” to effectively supervise these companies.

The UK’s approach to cryptocurrency

IOSCO’s first recommendation to treat cryptocurrencies like traditional financial assets is the opposite of what UK MPs recently proposed.

Some British politicians have pushed crypto trading out of high-risk industries such as gambling after a Treasury Commission investigation concluded that trading could be “addictive”. It is requested that they be regulated in the same way.

according to Guardian reportTreasury Chairman Harriet Baldwin recently said:

“With no intrinsic value, volatile prices, and unrecognizable social benefits, consumer transactions in cryptocurrencies like Bitcoin are more like gambling than financial services and should be regulated as such.” .”

Furthermore, the Finance Committee believes that regulating the cryptocurrency industry in the same way as the financial services industry would give an unfair legitimacy in the public’s eyes. There are concerns that the FCA’s oversight will lead investors to believe the market is safe or protected from losses.

However, IOSCO believes that:

“Given the similarities in the economic functions and activities of crypto-asset markets and traditional financial markets, many existing international policies, standards and jurisdictional regulatory frameworks are applicable to crypto-asset activities.”

Categories: UK, Regulation

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