WFE calls to address development of global stablecoins with a common taxonomy
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The World Federation of Exchanges (WFE) has today called for a response to the growth of stablecoins through the development of a common taxonomy capable of covering crypto assets broadly. WFE has asked the Financial Stability Board (FSB) along with other international standard-setting bodies to generate, adopt and use a global taxonomy for enabling a common understanding of whether a global stablecoin (GSC) or crypto-asset fits a certain classification or definition.
Nandini Sukumar, Chief Executive Officer of the WFE, said, “We support the overall ambition of seeking to address fragmented regulatory approaches by moving to an outcomes focus, applying the ‘same business, same risk, same rules’ principle; and building on the need for cross-border co-operation in the supervision of global stablecoin, both for wholesale and retail.”
According to WFE, the adoption of a common taxonomy will reduce variance between jurisdictions and curb regulatory dissonance. The FSB has been asked to consider three areas for further work including the creation of classifications via a taxonomy for all GSC and crypto-assets, application of the recommendations to all crypto-assets and application the cross-border co-operation recommendations and information-sharing requirements to the supervision of all those trading GSC/crypto-assets.
WFE’s press statement said, “Regulators should cooperate to share information on global stablecoins and crypto-assets and also on their issuers and the platforms on which they are traded. Without formalised co-ordinated approaches to enforcement and oversight in general, issues around market integrity and consumer protection will not be fully addressed. ”
Recently, the WFE published a report on measures undertaken by the industry to improve their existing cyber resilience tools during the COVID-19 pandemic.
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