Crypto firms call for global consensus instead of “fire hose” of rules

A “fire hose” of differing regulatory approaches to cryptoassets lack the global consensus needed to attract established investors that would create a maturer market, a conference was told on Wednesday.

The European Union has finalised the world’s first comprehensive rules for cryptoasset markets, known as MiCA, but others like Britain and the United States are further behind.

Apart from compliance with rules to stop money laundering and terrorist financing, crypto firms are largely unregulated in many parts of the world.

“It’s really commendable that Europe was able to get that done so quickly,” Hester Peirce, a commissioner at the US Securities and Exchange Commission, told a Financial Times conference.

“If we built a good regulatory regime, people would come. I think you will see that with MiCA. We are shooting ourselves in the foot by not having a regulatory regime in the US,” Peirce said.

US Congress needed to decide which regulatory body has authority over crypto, Peirce added.

US derivatives watchdog CFTC is also casting an eye on the sector as the need for clearer rules becomes more pressing after last year’s collapse of crypto exchange FTX.

But in the absence of other legal frameworks, EU rules will inevitably serve as international norms until there is consensus on a global standard, said Eva Gustavsson, head of public affairs at crypto firm Copper.

“We are drinking from a veritable fire hose right now of regulatory proposals, and that’s all over the world,” Gustavsson said.

“I think it would be unrealistic for any firm to think they were not going to need to comply with anything rather quickly.”

Global standards and harmonisation as much as possible are key, said Sarah Pritchard, executive director for supervision at Britain’s Financial Conduct Authority.

There would be global policy proposals shortly from IOSCO, an umbrella body for securities regulators, Pritchard said.

Gustavsson said more clarity on regulation would see more traditional, institutional investors entering the crypto market to “mature it further”.