The global regulatory framework for crypto assets and associated products and services should provide a level playing field along the activity and risk spectrum. We believe this should have the following three elements:
Crypto-asset service providers that deliver critical functions should be licensed or authorised. These would include storage, transfer, settlement and custody of reserves and assets, among others, similar to existing rules for financial service providers....
Requirements should be tailored to the main use cases of crypto assets and stablecoins. For example, services and products for investments should have requirements similar to those of securities brokers and dealers, overseen by the securities regulator. Services and products for payments should have requirements similar to those of bank deposits, overseen by the central bank or the payments oversight authority....
Authorities should provide clear requirements on regulated financial institutions concerning their exposure to, and engagement with, crypto. For example, the appropriate banking, securities, insurance and pension regulators should stipulate the capital and liquidity requirements and limits on exposure to different types of these assets, and require investor suitability and risk assessments. Further, if the regulated entities provide custody services, requirements should usually be clarified to address the risks arising from those functions.
From 'Global Crypto Regulation Should be Comprehensive, Consistent and Coordinated', International Monetary Fund
Crypto-asset service providers that deliver critical functions should be licensed or authorised. These would include storage, transfer, settlement and custody of reserves and assets, among others, similar to existing rules for financial service providers....
Requirements should be tailored to the main use cases of crypto assets and stablecoins. For example, services and products for investments should have requirements similar to those of securities brokers and dealers, overseen by the securities regulator. Services and products for payments should have requirements similar to those of bank deposits, overseen by the central bank or the payments oversight authority....
Authorities should provide clear requirements on regulated financial institutions concerning their exposure to, and engagement with, crypto. For example, the appropriate banking, securities, insurance and pension regulators should stipulate the capital and liquidity requirements and limits on exposure to different types of these assets, and require investor suitability and risk assessments. Further, if the regulated entities provide custody services, requirements should usually be clarified to address the risks arising from those functions.
From 'Global Crypto Regulation Should be Comprehensive, Consistent and Coordinated', International Monetary Fund
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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