The Commodities Futures Trading Commission’s (CFTC) Global Markets Advisory Committee (GMAC) recently voted to advance the Digital Asset Markets Subcommittee’s taxonomy recommendation to provide consistent language for participants in the digital asset ecosystem and “support U.S. regulatory clarity and international alignment.” It aims to standardize terminology for classifying assets and their functions to provide increased regulatory clarity, including in digital assets, central bank digital currencies (CBDCs), and stablecoins.
The approach aims to set out consistent language for participants in the digital asset ecosystem to promote innovation, identify and address risk considerations, and enable effective regulatory understanding. The clear, ‘consensus-driven approach’ to classifying assets would build upon the classification efforts of global prudential standard setters and regional authorities, including the Bank for International Settlements (BIS) and the Financial Stability Board (FSB).
The GMAC recommended this approach be considered on an initial basis, noting that “as the digital asset ecosystem continues to evolve, so too will the terminology used to classify it.” The Digital Asset Markets Subcommittee will reassess any future developments to provide further recommendations for this approach based on the guidance of its members.
Essentially, the digital asset taxonomy framework provides valuable foundational guidelines to further advance the discussion and promote U.S. regulatory clarity and was extensively vetted by stakeholders such as regulatory authorities, financial institutions, asset managers, market infrastructures, and service providers. It was advanced alongside two other recommendations aimed at promoting U.S. Treasury markets resiliency and efficiency.
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