Int’l securities body IOSCO prepares crypto regulation report for 2023

The International Organization of Securities Commissions (IOSCO) has announced that it will launch a consultation on its regulation report on crypto assets in Q2 2023. This comes as part of IOSCO's Fintech Task Force plan, which has two major workflows dedicated to decentralized assets. The first workflow covers crypto and digital assets, while the second covers decentralized finance (DeFi). The DeFi consultation is set to begin in Q3 of 2023.

IOSCO's work program for 2023-24 aims to support the development of sustainable and innovative capital markets while enhancing investor protection, maintaining market integrity, and reducing systemic risk. The organization's focus on investor protection is evident in both areas of the digital market it is examining.

In 2022, IOSCO published reports on DeFi, stablecoins, and influencers. These reports recommended that national regulators acquire supervisory capacities, including regulatory channels to report consumer complaints for misleading and illegal promotions and evidence-tracking processes to cope with the fast pace and changing nature of online information.

Regarding DeFi, the IOSCO urged national regulators to take a "granular and holistic understanding of the DeFi market," which could enhance their ability to create relevant legislation. The report on stablecoins, delivered by IOSCO and the Bank for International Settlements, defines the stablecoin arrangement as "combining a range of functions to provide an instrument that purports to be used as a means of payment and/or store of value."

IOSCO is an association of securities and futures regulators. Its board comprises 35 regulators and top executives, including the heads of the United States Commodity Futures Trading Commission, the U.S. Securities and Exchange Commission, and the United Kingdom Financial Conduct Authority, among others.

The upcoming consultation on its regulation report on crypto assets is an important step for IOSCO in promoting investor protection in the digital market. The consultation will help IOSCO better understand the regulatory challenges that the crypto industry faces and how they can be addressed. The final recommendations, which are planned to be published by the end of 2023, will be a significant milestone for the organization and will have a significant impact on the crypto industry as a whole.

In conclusion, IOSCO's work program for 2023-24 demonstrates the organization's commitment to enhancing investor protection while promoting sustainable and innovative capital markets. The upcoming consultation on its regulation report on crypto assets is an essential step in this direction, and the final recommendations are eagerly awaited by the crypto industry.