Global securities watchdog urges governments to regulate crypto like traditional financial assets

The International Organization of Securities Commissions (IOSCO) published a statement today contending that cryptocurrencies should be treated in the same way as traditional financial assets, such as stocks and bonds, as they are very similar in nature.

The global watchdog included its position among 18 core recommendations for countries to help them develop or adapt regulatory policies for the crypto industry.

However, the watchdog’s stance contradicts politicians in the U.K., who have called for crypto trading to be regulated like high-risk industries such as gambling.

The recommendations

IOSCO’s standards mainly cover dealing with conflicts of interest, market manipulation, cross-border regulatory cooperation, crypto-asset custody, operational risks, and technological risks. The watchdog also commented on the rights owed to retail investors, including access, suitability, and distribution.

IOSCO said regulators should tackle cryptocurrencies within existing frameworks where possible and develop new ones if the current systems are insufficient. The framework should cover “crypto-asset trading, other crypto-asset services, and the issuing, marketing, and selling of crypto-assets.”

According to the document:

“The regulatory approach should seek to achieve regulatory outcomes for investor protection and market integrity that are the same as, or consistent with, those that are required in traditional financial markets.”

Additionally, the IOSCO said regulators should take a consistent global approach to the sector as crypto companies often operate across multiple jurisdictions.

The watchdog urged regulators to “consider bilateral/multilateral cooperation beyond the context of enforcing” to ensure these companies can be supervised effectively.

UK’s approach to crypto

IOSCO’s first recommendation—to treat cryptocurrencies similarly to traditional financial assets—is the opposite of what MPs in the U.K. recently suggested.

Some British politicians have called for crypto trading to be regulated like high-risk industries such as gambling after a Treasury committee inquiry concluded that crypto trading can be “addictive.”

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Author: Assad Jafri

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