Securities watchdog IOSCO proposes the first global crypto regulations, covering conflicts of interest, custody, and more, aiming to finalize them by year-end
International securities watchdog IOSCO on Tuesday proposed the first global approach to regulating cryptoasset markets …
Context & Ripple Effects
IOSCO's proposal follows the Financial Stability Board's earlier crypto-regulation consultation, adding a securities-markets lens to the emerging international policy agenda. Its focus on custody and conflicts of interest targets functions that crypto platforms have often combined.
The proposal is an early step rather than a binding regime. Its direction was later reflected in IOSCO's 18 crypto-market recommendations, which expanded the framework to market-abuse and fraud controls.
First-order effects
- IOSCO member regulators receive a common policy baseline for assessing crypto-market conduct, custody arrangements, and conflicts of interest.
- Crypto platforms and custodians face clearer signals that safeguards familiar from securities markets may become central to supervisory expectations.
Second-order effects
- National regulators can use the IOSCO framework to make their own rulemaking more comparable, alongside regional work such as Europe's detailed MiCA proposals.
- Firms operating across jurisdictions may need to separate or more tightly control potentially conflicting activities, raising the value of compliance, custody, and surveillance capabilities.
Third-order effects
- If members translate these principles into domestic rules, crypto-market access could increasingly depend on demonstrable market-integrity and asset-protection controls rather than on a platform's self-defined operating model.
- A global baseline may narrow regulatory gaps, but uneven implementation would still leave room for regulated liquidity and compliance obligations to fragment by jurisdiction.
The trend: Crypto regulation is moving from isolated national restrictions toward interoperable market-integrity standards modeled on established securities oversight.