Thread by @EuCInitiative

IOSCO recently published its long-awaited consultation report on regulating #CryptoAssets, consisting of 18 high-level recommendations for global regulators to take into consideration when crafting and enforcing rules in this area.

⏰ The deadline to provide feedback has been set for 31 July, with a view to finalising them by September/October this year

👇 Key points of IOSCO's recommendations EU's #MiCA framework:

Main focus: Market integrity & investor protection;
Require #CASPs to implement fair, orderly, and timely transactions;

Enhance transparency to promote price discovery & competition;
Oblige CASPs to disclose information about the crypto-asset and issuer; Manage conflicts of interest between listed assets & CASPs;

Address market abuse, prevent leakage of insider information;
Ensure user assets are safely stored, segregated, and secure;
Diligently assess and onboard retail investors.

🟣 IOSCO recommendations extend beyond MiCA by introducing governance & organisational requirements to mitigate conflict of interest issues - which could lead to legal unbundling of certain crypto-asset services.

🟣 Notable omissions in the report are prudential requirements for #CASPs (expected to be addressed by the Financial Stability Board) and offers to the public/primary issuance which MiCA covers (e.g. requiring prospectuses called “whitepapers”) as this is part of IOSCO’s mandate.

No definition of “crypto-asset” is provided, probably reflecting differences in national approaches but leaving a question mark on the categories clearly in or out of scope under #MiCA;

#Stablecoins are clearly intended to be captured, but only in relation to services provided by CASPs (and as in MiCA with additional requirements), but the recommendations do not cover stablecoin offers to the public nor reserve or own-funds requirements;

The proposed recommendations do not cover #DeFi, which is being looked at by a separate IOSCO working group, with draft recommendations expected in Q3 2023 (and finalisation before year-end). No mention of #NFTs is made either.

👉 While its impact towards the #EU may not be immediate, other jurisdictions (such as the US and UK) may be already influenced by the report.

🗓️ Upcoming milestones in the international standard-setting scene:

July 2023: Final FSB recommendations on global #stablecoin arrangements & crypto-asset markets;

Q3 2023: IOSCO Consultation report with DeFi regulation recommendations;

Sep 2023: Joint FSB/IOSCO paper outlining a common international regulatory approach for #CryptoAssets;

Late Sep/Oct 2023: Final IOSCO report and recommendations on crypto-assets;

Oct 2023: IOSCO final recommendations on retail market conduct;

End 2023: Potential FSB report on financial stability implications of #DeFi.

Read the IOSCO consultation report on regulating crypto-assets here:

iosco.org/library/pubdoc…

#CryptoRegulation