Governments across the world are calling for the establishment of a global regime for crypto regulation as a “top priority”. The crypto market is in bad light following a drastic decline. 2021 saw a broad adoption of digital assets.
Ashley Alder, the chair of the International Organization of Securities Commissions (IOSCO), pointed out that there is a wall of worry about crypto in the conversations at an institutional level. He said some of the areas in which regulators have fallen behind are operational resilience, cyber security, and lack of transparency. Alder highlighted the need for a joint body coordinating cryptocurrency regulations at the global level. This body is likely to be established within the next year. The chair said such a body or association doesn’t exist for digital assets at the moment. But now, it’s seen as one of the three Cs – COVID, Climate, and Crypto. This has gone up the agenda.
Klaas Knot, the Financial Stability Board Chairman, emphasized, last week at the annual meeting of the International Swaps and Derivatives Association in Madrid, that his organization could play in such a global regime. The Board is set to take a leading role in the design of a coherent global regulatory framework for crypto assets.
The call for regulation has intensified following the collapse of the TerraUSD stablecoin. The market crash prompted renewed efforts for crypto regulation at national levels as well. The Consumer Financial Protection Bureau (CFPB) invoked a largely dominant legal provision last month to boost its power over crypto and fintech firms. The Dodd-Frank Act allows the authority to hold non-banks to the same standards that banks are held to. It believes the crypto firms threaten consumer protection.
Furthermore, a recent document leak revealed that the government of South Korea plans to introduce a crypto framework in 2023 – to be implemented in 2024.
