T Skevington and M Bacina
IOSCO publishes statement on study of emerging global stablecoin proposals
The International Organization of Securities Commissions (IOSCO) recently released a short public statement on IOSCO's study of emerging global stablecoin proposals (read: Libra and its prospective competitors). This statement has been released following a meeting of the IOSCO Board on 30 October 2019 in Madrid.
While the IOSCO's statement is naturally broad, being informed by and light on detail, it reaffirms statements by most prominent global regulators, including ASIC , that while global stablecoins offer many promising benefits, regulators are conscious of various risk areas including consumer protection, market integrity, transparency, conflicts of interest and financial crime, as well as potential systemic risks.
IOSCO's discussions have purportedly been supported by an assessment prepared by te the IOSCO FinTech Network on how IOSCO Principles and Standards could apply to global stablecoin initiatives. Unsurprisingly, IOSCO's statements provides that the assessment concluded that a case-by-case approach is needed to establish which IOSCO Principles and Standards, and national regulatory regimes, would apply to any global stablecoin proposal. The IOSCO FinTech Network is currently chaired by the UK's Financial Conduct Authority (FCA), which has recently released a number of comprehensive guidance statements on cryptoassets (including consultation paper CP19/3, and policy statement PS19/22).
Ashley Alder, Chair of the IOSCO Board, said:
Our analysis has shown that so-called ‘stablecoins’ can include features that are typical of regulated securities. 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.
For context, IOSCO is an international body that provides a forum for the world's securities regulators to discuss policy, and is recognised as the global standard setter for the securities sector. IOSCO develops, implements and promotes adherence to internationally recognised standards for securities regulation, and works in collaboration with the G20 and the Financial Stability Board on the global regulatory reform agenda.