A committee that advises the Commodity Futures Trading Commission voted Wednesday to advance digital asset taxonomy, an unprecedented step forward in providing regulatory clarity. This framework is intended to help draft future laws and regulations.
The CFTC’s Global Markets Advisory Committee voted to recommend a comprehensive digital asset taxonomy developed by the Digital Asset Markets Subcommittee. The recommendations, currently under consideration by the CFTC, standardize terminology for regulatory clarity and address digital assets, central bank digital currencies, stablecoins, and more.
“A good friend of mine always says words make the world, and we’re hoping these words will create regulation where appropriate,” Caroline Butler, global head of digital assets at BNY Mellon, said at the conference. Butler also co-chairs the GMAC Digital Asset Markets Subcommittee.
Lawmakers in Washington have focused over the past year on taking a comprehensive approach and creating a federal framework for stablecoins while also drafting legislation to regulate cryptocurrencies. Regulators have been prosecuting cryptocurrency companies while establishing rules affecting the cryptocurrency industry. Meanwhile, the industry said it needs clarity from both lawmakers and regulators about how the rules and laws are applied.
new approach
According to the panel presentation, the new taxonomy appears to have “consistent language that enables digital asset ecosystem participants to foster innovation, identify and address risk considerations, and enable effective regulatory understanding.” The approach will build on the work done by global standard-setting bodies such as the Financial Stability Board, they said.
“As we understand from many of our global members, as well as international organizations and regulators around the world, the quality of the output is also tremendous, given the socialization and feedback,” said CFTC Commissioner Caroline. Palm during Wednesday’s meeting. Pham also sponsors the Global Markets Advisory Committee.
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