The International Organization of Securities Commissions (IOSCO) has published its framework to govern the sector in the next few years by addressing the lack of cryptocurrency regulations.
The framework by IOSCO’s Board-level Fintech Taskforce (FTF) will focus on two workstreams focusing on Crypto and Digital Assets (CDA) and decentralised finance (DeFi), the guidelines published on July 7 indicated.
Each workstream plans to publish a report with policy recommendations by the end of 2023.
Protecting investors from losses
According to the task force established early this year, the investor losses witnessed this year are due to a lack of regulations in the market. Therefore, the FTF indicated that there is a need to protect investors and respond to market integrity.
“IOSCO’s ambitious roadmap will deliver the global policies needed by regulators to address the considerable risks arising from a rapidly developing, complex and opaque crypto-asset ecosystem whilst preserving the societal benefits of innovation,” said Ashley Alder, IOSCO Chair and Chief Executive Officer.
The group is also collaborating with the Financial Stability Board (FSB) on elements such as possible risks to financial stability considering the cross-border nature of cryptocurrencies. The collaboration will also entail exchanging information at both global and regional levels.
“The cross-border nature of crypto assets and markets calls for a robust set of policy recommendations to support consistent and coordinated regulatory action. In carrying out its work, the IOSCO Fintech Task Force will collaborate closely with other international bodies to address the priority areas of market integrity and investor protection, as well as their implications for financial stability,” said FTF chair Tuang Lee Lim.
Increased focus on crypto regulation
Following the recent growth of cryptocurrencies, the IOSCO has been actively involved in pushing for crypto regulations globally. As reported by Finbold, Alder hinted that a global crypto regulation body might be unveiled by next year.
According to Alder, the regulatory body would likely focus on coordinating the development of uniform crypto sector regulations. Notably, the focus on cryptocurrencies is part of the organisation’s three key elements of Covid-19 and climate change.