Global securities regulators have declared that cryptocurrencies that are pegged to a basket of assets, known as “stablecoins,” could fall under securities rules.
In a public statement following its meeting in Madrid, the International Organization of Securities Commissions (IOSCO) said that efforts to develop so-called global stablecoins — which are cryptocurrenices designed to minimize volatility by pegging their value to certain assets — need to be examined on a case-by-case basis to determine whether they attract global securities requirements.
“Our analysis has shown that so-called ‘stablecoins’ can include features that are typical of regulated securities,” said Ashley Alder, chair of IOSCO’s board.
“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,” he added.
Alder said that global securities regulators agree with the G20’s recent finding that the prospect of global stablecoins pose “serious public policy and regulatory risks.”
At the same time, IOSCO said that its board also acknowledges that stablecoins could provide benefits to the financial industry, consumers and investors.
“We therefore encourage international collaboration, so the risks relating to stablecoins can be identified and mitigated, and the potential benefits realised,” Alder said.
IOSCO noted that it will work with various global standards setters to develop a coordinated policy response to the development of global stablecoins.
“It is important that those seeking to launch stablecoins, particularly proposals with potential global scale, engage openly and constructively with all relevant regulatory bodies where they may be seeking to operate,” Alder said.