Crypto and TradFi Widely Welcome IOSCO’s Proposed Standards for Digital Asset Markets

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Industry stakeholders widely welcomed the new standards for the crypto sector proposed by the International Organization of Securities Commissions (IOSCO) on Wednesday, but are unsure what the existing rules will look like.

The regulator’s 18 policy recommendations for the global crypto industry cover a range of issues, including market abuse, conflicts of interest and consumer protection, and are designed to contribute to a broader effort by international bodies. to oversee what regulators see as an unstable financial market.

Regulators around the world have so far taken divergent approaches to tackling the sector, ranging from outright bans in countries like China and legal crackdowns in the United States, to the establishment of licensing regimes. of licenses like the Regulation of Crypto Asset Markets (MiCA) in the European Union.

For crypto players, universal industry standards are a welcome signal.

IOSCO’s new blueprint is a boost for regulators around the world to move towards a more harmonized system, Antoni Trenchev, co-founder of crypto trading platform Nexo said in a statement.

Regulators around the world should be able to review crypto transactions or holdings for compliance at any time, said Haydn Jones, global head of blockchain and crypto solutions at financial advisor Kroll.

Having the frameworks in place to do this is a vital step in protecting against criminal activity, but also allowing everyone to benefit from the underlying technology that cryptocurrencies are built on, Jones said in a statement.

The recommendations also advance the creation of a baseline for cross-border standards to build upon,” Chris Woolard, a regulatory expert at blockchain platform EY, said in a statement emailed to CoinDesk. .

Cross-jurisdictional crypto regulation is indeed overdue, but its effectiveness in practice remains to be seen, according to Woolard.

Those in traditional finance, who apparently took a step back from entering the crypto markets after the dramatic market meltdown last year, may also need convincing.

While the goal of these proposed recommendations is to safely integrate the crypto sector into mainstream finance, the exact consequences and execution remain to be determined, said Rajeev Bamra, senior vice president of Moodys Investors Service. , in a press release.

Still, they have the potential to shape the regulation and oversight of the crypto industry in significant ways, Bamra added.

While Bamra said the DeFi standards, once published, could help increase investor confidence, reduce risk exposure and encourage more consistent regulation “across all jurisdictions, Chris Perkins, Chairman and Managing Partner from investment firm CoinFund praised IOSCO for not mixing up DeFi in its guidance document covering crypto-asset service providers.

There will always be a tension in the crypto market between the nature of crypto, a decentralized technology, located above traditional jurisdictional boundaries, taking risks, pushing technological boundaries and the desire of governments to implement regulations to protect consumers, said Will Charlesworth. , a crypto assets partner at UK-based Keystone Law.

IOSCO will accept public comments on its proposed recommendations until July 31.

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