The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, called for a response to the growth of stablecoins by developing a common taxonomy that would also cover crypto-assets more broadly. This would create consistent and common regulatory classifications before they fragment further, rather than trying to fix differences after the fact.
The WFE asked the Financial Stability Board, and other international standard-setting bodies, to generate, adopt and use a global taxonomy as it would drive a common understanding of whether a global stablecoin (GSC) or crypto-asset fits a certain classification or definition. This would reduce the variance between jurisdictions and curb regulatory dissonance. A periodic review of the taxonomy would ensure that forms of GSC and crypto-assets, which have matured and may constitute a new, viable and commonly used product, can be incorporated and regulated accordingly.
The WFE asked the FSB to consider three areas for further work:
- Creating classifications via a taxonomy for all GSC and crypto-assets
- Application of the recommendations to all crypto-assets
- Applying the cross-border co-operation recommendations and information-sharing requirements to the supervision of all those trading GSC/crypto-assets
Regulators should cooperate to share information on global stablecoins and crypto-assets and also on their issuers and the platforms on which they are traded, the WFE said. Without formalised co-ordinated approaches to enforcement and oversight in general, issues around market integrity and consumer protection will not be fully addressed.
Nandini Sukumar, Chief Executive Officer of the WFE said; “We support the overall ambition of seeking to address fragmented regulatory approaches by moving to an outcomes focus, applying the ‘same business, same risk, same rules’ principle; and building on the need for cross-border co-operation in the supervision of global stablecoin, both for wholesale and retail.”
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