Cardano Foundation Suggests New Policy Recommendation For Crypto

The Cardano Foundation has responded to IOSCO’s policy recommendation for crypto, suggesting new policies that will contribute to the industry’s growth.  

The Cardano Foundation said it recently responded to the policy recommendation by the International Organization of Securities Commissions (IOSCO) for the crypto and digital asset markets. 

We recently responded to @IOSCOPress policy recommendations for the crypto and digital assets markets.

Here’s a short thread that summarizes our response.

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— Cardano Foundation (@Cardano_CF) August 11, 2023

Cardano Foundation’s Response 

Notably, the Cardano Foundation summarized its response to IOSCO in a tweet today. The organization recommended that the relevant authorities establish policies differentiating blockchain infrastructure and its various applications. 

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Interestingly, the Cardano Foundation supported the IOSCO report’s activity-based approach. However, it added that a function-focused categorization would help improve clarity for crypto stakeholders. 

Furthermore, the Cardano Foundation declared support for functional and outcome-driven rules, adding that overly prescriptive rules are quickly outdated due to the fast-paced innovation of the blockchain industry. 

Per the organization, there is a need for a flexible, risk-based framework that reduces risks in a commensurate manner. 

Blockchain Opportunities Transcend Financial Use Cases

Lastly, the Cardano Foundation agreed with IOSCO’s recommendation of “same activity, same risk, same outcome” principle. However, the organization said emerging technology is usually seen through financial activities’ “risk” lens. 

While acknowledging blockchain has associated risks, the Cardano Foundation said the technology’s opportunities go beyond finance. 

“To sum it up, we believe regulation must help, not hinder, innovation and must take an outcome-driven approach. Appropriate rules, built on suitable principles, help foster innovation while reducing potential risks and unwanted social costs,” it added. 

The Cardano Foundation is a Swiss-based non-profit organization tasked with advancing the public digital infrastructure of the Cardano network. In June, the organization recently disagreed with the SEC over classifying ADA as a security. 

As reported, the SEC labeled ADA as an unregistered security in its lawsuit against Binance and Coinbase. 

IOSCO Issues Global Crypto Regulation Recommendation 

Meanwhile, IOSCO is an association of organizations that regulates the global securities and futures markets. On May 23, IOSCO issued its global crypto regulation recommendations.

The recommendations relate to how IOSCO thinks crypto users should be protected and how trading should meet the standards that apply in public markets. 

Commenting on the development, the chairperson of IOSCO, Jean-Paul Servais, said: 

“Today’s consultation paper received unanimous support from the IOSCO Board and is the outcome of an intense period of regulatory risk analysis, information sharing, and capacity building.”