International Organization of Securities Commissions Releases Policy Recommendations for DeFi

Published: December 20, 2023 at 8:49 am Updated: December 20, 2023 at 8:50 am

Edited and fact-checked:
December 20, 2023 at 8:49 am

In Brief

IOSCO issued policy recommendations for DeFi to guide relevant authorities and jurisdictions effectively establish compliant markets.

International Organization of Securities Commissions Releases Policy Recommendations for DeFi

The International Organization of Securities Commissions (IOSCO), an association of organizations regulating global securities and futures markets, issued policy recommendations for decentralized finance (DeFi).

Aligned with IOSCO’s established approach to securities regulation policy, these recommendations aim to guide relevant authorities and jurisdictions in establishing compliant markets effectively.

Emphasizing the principle of “same activities, same risks, same supervision/supervision outcomes,” IOSCO seeks consistency in the regulatory approach to crypto asset markets and securities markets across its jurisdictions, seeking to establish compliant markets in the most effective manner.

The recommendations stress the importance of enhanced cooperation between regulators to coordinate and respond to cross-border challenges in enforcement and regulation and to address regulatory arbitrage issues arising from the cross-border nature of global crypto asset activities conducted by DeFi participants.

Regulatory Parity for DeFi

As the adoption of DeFi grows, IOSCO continues to underscore the necessity for regulatory oversight in this evolving financial landscape.

In a recent development, IOSCO has advocated for governments to regulate DeFi applications on par with traditional financial market players, emphasizing the need for responsibilities and obligations in line with established regulations in traditional finance (TradFi).

IOSCO’s policy recommendations for DeFi signify a crucial step toward regulatory coherence, urging global authorities to align responsibilities and obligations in this decentralized landscape with established standards in traditional finance, as the adoption of DeFi continues to influence the financial industry.

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and engagement with scientific writing.

Alisa Davidson