Faced with the rapid growth of the market for cryptocurrencies and the resulting risks, theInternational Organization of Securities Commissions (IOSCO) recently published a report with 18 policy recommendations aimed at regulating this sector. These proposals relate in particular to the management of conflicts of interest, the protection of investors against market manipulation and fraud, and the strengthening of international cooperation.
An international framework to better protect investors
Cryptocurrencies are now a major issue for financial markets, attracting the interest of investors, companies and individuals all over the world. However, these non-monetary assets also pose many challenges in terms of regulation and control.
IOSCO, which brings together 130 financial market regulators around the world, wishes to contribute to the ongoing discussion by proposing a international regulatory framework adapted to this new reality. Among the main recommendations:
- Recommendation 1: Establish a clear and consistent definition of crypto-assets internationally.
- Recommendation 2: Encourage transparency and adoption of accounting standards for cryptocurrency-related businesses.
- Recommendation 3: Strengthen surveillance of crypto-asset markets and promote increased international cooperation between regulators.
Other recommendations relate to the prevention of money laundering, the fight against the financing of terrorism or the protection of user data. IOSCO thus hopes to provide a harmonized framework which will allow the different jurisdictions to put in place regulations adapted to their specificities while maintaining a high level of protection for investors.
An ongoing public consultation to refine the proposals
IOSCO has launched a consultation process which should be completed by the end of July. This approach aims to gather the opinions of the various stakeholders in order to refine the proposed recommendations and better respond to the challenges posed by cryptocurrencies. The actors concerned therefore have the opportunity to share their comments and suggestions, thus contributing to the development of an effective and appropriate regulatory framework.
Mixed reactions from the crypto industry
While some players in the cryptocurrency sector welcome this initiative and IOSCO’s desire to propose a harmonized framework, others express concerns about the implementation of regulations that are too restrictive. They fear that these measures could hamper innovation and growth in the cryptocurrency market.
Nevertheless, it is crucial to strike a balance between protecting investors and developing this growing industry. IOSCO’s recommendations thus constitute a first step towards the establishment of a global regulatory framework to regulate cryptocurrencies while preserving their economic potential.
Convergence with existing regulations in some jurisdictions
The principles set out by IOSCO are consistent with certain regulations already adopted at the national or regional level. For example, theEuropean Union recently implemented regulations MiCA (Markets in Crypto-assets), which aims to regulate crypto-asset markets and protect investors. This convergence testifies to the desire of the various international players to work together to develop common rules in the face of the challenges posed by cryptocurrencies.
The need for international cooperation
To be effective, the regulation of cryptocurrencies must be based on close cooperation between the different jurisdictions. Indeed, these decentralized digital assets know no borders and can easily escape isolated national regulations. IOSCO’s initiative is therefore part of a desire to strengthen international cooperation and to harmonize regulations in order to better protect investors and prevent the risks associated with the use of cryptocurrencies.
IOSCO’s recommendations are a first step towards the establishment of global regulation of cryptocurrencies, making it possible to better regulate this booming sector and to protect investors. It is now crucial that the various international players work together to develop common rules adapted to the challenges posed by these digital assets.