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Global crypto regulation body likely in next year, top official says
Global Banking & Finance Review®
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By Marc Jones and Alun John
LONDON/HONG KONG (Reuters) – Global market regulators are likely to launch a joint body within the next year to better co-ordinate cryptocurrency rules, a senior watchdog official has said.
Ashley Alder, chair of the International Organization of Securities Commissions (IOSCO) said the boom in digital currencies such as bitcoin was one of the three main areas authorities were now focused on, alongside COVID and climate change.
“If you look at the risks we need to address, they are multiple and there is a wall of worry about this (crypto) in the conversations at an institutional level,” Alder said during an online conference organised by the OMFIF thinktank on Thursday.
He cited cyber security, operational resilience, and a lack of transparency in the crypto world as the key risks that regulators are lagging behind on.
Focus on crypto markets has intensified again this week amid more wild volatility that has long-alarmed watchdogs.
The collapse of so-called ‘stablecoin’ TerraUSD saw the chairman of the Senate Banking Committee on Wednesday urge U.S. lawmakers to toughen up crypto regulations, while bitcoin has also slumped nearly 20% this week.
Alder said a global group that tried to align crypto rules was clearly needed, likening it to various set-ups already in place for climate finance, including one under the G20 group of leading economies.
“There isn’t anything like that for crypto at the moment,” said Alder, who is also CEO of Hong Kong’s Securities and Futures Commission.
“But I do think now it’s seen as one of the three C’s (COVID, climate and crypto) so it’s very, very important. It has gone up the agenda, so I would not expect that to be the case the same time next year.”
(Reporting by Marc Jones in London and Alun John in Hong Kong; editing by Jason Neely)
Cryptocurrency is a digital or virtual form of currency that uses cryptography for security. It operates on decentralized technology called blockchain, which ensures transparency and security in transactions.
Blockchain is a distributed ledger technology that records transactions across multiple computers. It ensures that the recorded transactions cannot be altered retroactively, providing security and transparency.
Financial regulation refers to the laws and rules that govern financial institutions and markets. It aims to maintain the integrity of the financial system, protect consumers, and prevent financial crises.
Cybersecurity involves protecting computer systems, networks, and data from theft, damage, or unauthorized access. It is crucial for safeguarding sensitive financial information in the digital age.
A stablecoin is a type of cryptocurrency designed to maintain a stable value by pegging it to a reserve of assets, such as fiat currency or commodities, to reduce volatility.
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