IOSCO Calls For Convergence of Crypto And TradFi Rules

IOSCO has made progress in dealing with concerns in the fast-changing crypto market. In their recent consultation report, IOSCO shared its policy recommendations. 

To make these markets safe for investors, these recommendations aim to make them comply with rules and regulations. Cryptocurrency’s evolving world needs trust and stability, and IOSCO promotes them.

Crypto Industry Prepares for Regulatory Changes

Crypto and Digital Asset Recommendations (CDA Recommendations) follow IOSCO’s proven securities regulation approach. These recommendations are not mandatory, but they offer valuable guidance on how to regulate the crypto market. 

Crypto can attract more institutional investment and boost investor confidence by implementing these recommendations.

The recommendations focus on six main areas that align with IOSCO standards. Crypto industry concerns are addressed in the recommendations. Conflicts of interest, insider trading, and market manipulation are among them.

In addition, they manage cross-border transaction risks, safeguard client assets and custody, mitigate technology and operational risks, and keep crypto assets fair.

Instead of trying to develop a universal, detailed classification system, IOSCO has adopted a practical, cost-effective approach to addressing risks.

All regulators can use these recommendations as a general guide. IOSCO encourages members to apply these principles consistently to achieve desired outcomes.

The report recommends aligning regulatory outcomes for investor protection and market integrity in crypto-assets with those of traditional financial markets. This aims to establish a level playing field and minimize the risk of regulatory arbitrage.

UK Treasury Committee: Treat Cryptocurrency Trading as Gambling?

Cryptocurrencies should be treated like traditional assets, not what the UK Treasury Committee wants them to be. Instead of regulating cryptocurrency trading as a financial service, it should be regulated as gambling.

The Treasury Committee made its recommendation following an investigation into the cryptocurrency industry. Investors aren’t properly protected by existing regulations, according to the inquiry. 

To enhance consumer protection, the committee proposed bringing cryptocurrency trading under the jurisdiction of the Gambling Commission.

Contrarily, the IOSCO recommendation suggests treating cryptocurrencies similarly to traditional financial assets. The idea is to make crypto-assets and traditional financial markets more fair so regulators can’t exploit them.

Due to regulatory uncertainty and a lack of clear guidelines, the crypto-asset industry has faced challenges. The IOSCO recommendations provide a framework for compliant markets, which is good for the industry. The move by IOSCO is a great step towards enhancing transparency and minimizing risks.

IOSCO’s recommendations aren’t obligatory, and individual jurisdictions can adopt them. With more regulation and transparency, IOSCO’s recommendations remain unclear. These jurisdictions will determine the implementation and impact of the recommendations.