International securities regulator denies bespoke regime for stablecoins, emphasises accountability for financial influencers

International Organisation of Securities Commissions

18th November 2023 – (Madrid) The International Organisation of Securities Commissions (IOSCO), the global standards setter for securities markets regulation, has rejected requests from the crypto industry for a bespoke regulatory regime for stablecoins. However, it has agreed to demands for greater accountability from “financial influencers.” The recommendations, published on Friday after a consultation period that began in May, aim to establish a coordinated global regulatory response to the risks posed by crypto asset service providers (CASPs) among IOSCO members.

IOSCO highlighted that the risks associated with CASPs, including market abuse, conflicts of interest, client asset protection, and disclosures, are similar to those observed in traditional financial markets. As a result, the regulatory approach taken by IOSCO aligns with its existing principles and standards for securities markets regulation.

According to the report, many respondents to the consultation called for increased accountability for financial influencers. In response, IOSCO recommended that regulators collaborate with relevant authorities to ensure accurate disclosure of products, services, and associated risks in crypto promotions. CASPs should also disclose any commercial arrangements they have with individuals providing investment advice on their platforms.

While some respondents, including various blockchain industry associations, advocated for a specialized regulatory framework for stablecoins, arguing that current requirements are burdensome, IOSCO rejected this position. The organisation reaffirmed that its rules will apply to stablecoins.

IOSCO serves as the international policy forum for securities regulators, with its members overseeing more than 95% of the world’s securities markets across approximately 130 jurisdictions.