Global Standards Setter for Securities Regulation Publishes Crypto Markets Policy Recommendations

IOSCO denied crypto industry requests for a bespoke regime for stablecoins while requiring closer cooperation between regulators in promotional material.

AccessTimeIconNov 17, 2023 at 8:34 a.m. UTC
Updated Mar 9, 2024 at 1:57 a.m. UTC

The International Organization of Securities Commissions, the global standards setter for securities markets regulation, denied crypto industry requests for a bespoke regime for stablecoins while agreeing to demands for greater accountability from so-called financial influencers.

The recommendations for regulating crypto, published Friday after a consultation period that started in May, are meant to help establish a coordinated global regulatory response to the risks posed by crypto asset service providers (CASPs) among the group's members. Those risks include market abuse, conflict of interest, client asset protection and disclosures, it said at the start of the process.

"The activities of CASPs and their associated risks frequently mirror those observed in traditional financial markets," Tuang Lee Lim, chair of IOSCO's financial task force, said in a statement. "The regulatory approach taken is therefore consistent with IOSCO’s principles and associated standards for securities markets regulation."

Many respondents asked for greater accountability for financial influencers, the report said. In response, IOSCO said regulators should work with other relevant authorities to ensure crypto promotions accurately disclose the product and service provided along with the associated risks. CASPs should also disclose any commercial arrangements with people providing investment advice on crypto assets that trade on their platform.

Some respondents to the consultation, including the various blockchain industry associations, advocated for a bespoke regime for stablecoins, claiming the current requirements would be burdensome. IOSCO rejected that stance and reiterated that its rules will apply to stablecoins.

IOSCO is the international policy forum for securities regulators, and its members regulate more than 95% of the world's securities markets in some 130 jurisdictions.

Amitoj Singh contributed to the reporting.

UPDATE (NOV. 17, 10:15 UTC): Rewrites throughout, adds key recommendations to first paragraph.

Edited by Sheldon Reback.


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Camomile Shumba

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.