According to the guidelines published on July 7, the framework by IOSCO’s Board-level Fintech Taskforce (FTF) will focus on two workstreams: Crypto and Digital Assets (CDA) and decentralised finance (DeFi).
Each workstream will 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 the result of a lack of regulations for crypto. The FTF stated that there is a need to protect investors while also maintaining 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 issues such as potential threats to financial stability due to 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 advocating for crypto regulations globally. Alder hinted that a global crypto regulatory agency might be announced by next year.
The regulatory organisation, according to Alder, would most 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, along with Covid-19 and climate change.
