IOSCO Board Met to Discuss Stablecoins
International Organization of Securities Commission (IOSCO) explained that some stablecoin implementations might be part of the securities. In a statement released on November 4, IOSCO informed everyone that its board met last October 30. There they discussed – among other purposes – stablecoins and other potential application of securities market regulations.
In addition to that, the regulator noted that it studied a lot of stablecoins throughout 2019. It accepted its potential benefits for market participants, investors, and consumers.
However, IOSCO gave a warning that stablecoins might also have potential risks in the parts of consumer protection, market integrity, conflicts of interest, transparency, financial crime, and potential danger.
Then, to understand how they can regulate a given stablecoin, they must first determine how it operates, according to IOSCO. Notably, the regulator mentioned the need to know the rights and obligations the given crypto assets give to network participants. Also, they must identify the continuing responsibilities of the investors when attempting to establish if a given crypto asset is security.
IOSCO Board Chair on Stablecoins being Securities
Ashley Alder, board chair of IOSCO, added that stablecoins could acquire features like general regulated securities. He also indicated that this might mean they could regulate several stablecoin implementations as securities.
Alder stated, “This means IOSCO Principles and Standards may apply to stablecoins depending on how they are structured, including those related to disclosure, registration, reporting, and liability for sponsors and distributors.”
Moreover, members of IOSCO regulate more than 95% of the securities markets around the world. And this is in over 115 jurisdictions. Above all, they recognize the organization as the global securities regulation standard setter.
Now, moving away from IOSCO, recently, stablecoins are seeing an increase in adoption with Ethereum-based DAI. And it is now spendable where VISA cards are available. Then, leading stablecoin Tether (USDT) sees an improving use by e-commerce organizations as well as Facebook spearheading the Libra stablecoin project.
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