International Securities Regulator Issues Policy Guidelines for Crypto Markets

The International Organization of Securities Commissions (IOSCO) has recently declined requests from the cryptocurrency industry for a specialized regulatory framework dedicated to stablecoins. Instead, IOSCO emphasized the necessity for increased collaboration among regulators in their promotional efforts. As the foremost global authority in establishing standards for securities market regulation, IOSCO also acknowledged the growing demand for heightened transparency from financial influencers within the industry.

The recommendations, unveiled on a Friday subsequent to a consultation period that commenced in May, are designed to pave the way for a cohesive global regulatory strategy. This strategy aims to effectively address the potential risks associated with crypto asset service providers (CASPs) operating within the organization's member states. These risks encompass a spectrum ranging from market abuse and conflicts of interest to the protection of client assets and the enforcement of proper disclosures, all outlined at the inception of the consultation process.

Tuang Lee Lim, the chair of IOSCO's financial task force, affirmed that the activities and risks posed by CASPs closely mirror those observed in traditional financial markets. Consequently, the regulatory approach endorsed by IOSCO aligns seamlessly with its established principles and the associated standards that govern securities market regulation.

The report shed light on numerous requests from industry participants for an increased level of accountability among financial influencers. In response, IOSCO recommended that regulators engage in collaborative efforts with relevant authorities to ensure the accurate disclosure of cryptocurrency promotions. This involves providing comprehensive details about the products and services offered, coupled with a thorough examination of associated risks. Furthermore, CASPs were strongly advised to disclose any commercial agreements with individuals offering investment advice on crypto assets traded on their platforms.

Despite advocacy from various stakeholders, including blockchain industry associations, for a bespoke regulatory framework tailored to stablecoins, IOSCO firmly rejected this proposition. The organization reiterated its stance, emphasizing that its regulatory standards will universally apply to stablecoins without exception.

As the international policy forum for securities regulators, IOSCO assumes oversight of members responsible for regulating over 95% of the world's securities markets spanning approximately 130 jurisdictions.

Read More: AVAX and NEAR Outperform Ether and Bitcoin Amidst Asia's Market Downturn