A worldwide securities regulator has called for crypto to be treated the same as fiat currency
On May 23, the International Organisation of Securities Commissions released 18 fundamental suggestions for nations to use as they create or modify their crypto sector regulatory rules.
Because of its similarities to stocks and bonds, the International Organisation of Securities Commissions (IOSCO) has issued a statement today arguing that cryptocurrency should be regulated in the same manner.
To aid nations in formulating or adjusting regulating regulations for the crypto business, the global watchdog put its viewpoint among 18 basic recommendations.
The watchdog’s position is at odds with that of legislators in the United Kingdom, who have urged for crypto trading to be controlled in the same way that gambling and other high-risk businesses are.
When it comes to crypto-asset custody, cross-border regulatory cooperation, operational risks, and technical risks, IOSCO’s guidelines have you covered. The regulator offered its thoughts on the duties due to retail investors in terms of availability, appropriateness, and dissemination.
When addressing cryptocurrencies, IOSCO recommended that regulators use preexisting frameworks whenever feasible and create new ones where necessary.
This is what the paperwork says: “The regulatory strategy should aim for the same or similar regulatory results for investor protection and market integrity as are necessary for conventional financial markets.”
Since many crypto businesses operate in many countries, the IOSCO recommended a unified worldwide strategy for regulation.
The first IOSCO suggestion is the exact reverse of what U.K. lawmakers have lately proposed: to treat cryptocurrencies like ordinary financial assets.
After a Treasury committee probe found that cryptocurrency trading may be “addictive,” several British legislators argued for regulation along the lines of high-risk businesses like gambling.
The Guardian reports that Harriett Baldwin, head of the Treasury committee, recently said: “Consumer trading of cryptocurrencies like Bitcoin resembles gambling more than a financial activity and should be regulated as such, given they have little inherent value, enormous price volatility, and no obvious social benefit.”
The Treasury committee also thinks that legitimising cryptocurrencies by treating them like the financial services sector would be a mistake. There is the worry that investors would mistakenly conclude the market is secure or that they will be shielded from losses due to FCA oversight.
IOSCO, on the other hand, thinks: “Many preexisting international rules, standards, and jurisdictional regulatory frameworks are relevant to crypto-asset operations because of the similarities between the crypto-asset market and conventional financial markets in terms of economic functions and activities.”
