A committee tasked with advising the Commodity Futures Trading Commission (CFTC) voted on Wednesday to advance a digital assets taxonomy that they describe as unprecedented in offering regulatory clarity. This framework is intended to help draft future legislation and regulations.
The CFTC’s Global Markets Advisory Committee voted to recommend a comprehensive digital assets taxonomy developed by its Digital Asset Markets Subcommittee. This recommendation, now up for CFTC’s consideration, seeks to standardize terminology for regulatory clarity and covers digital assets, central bank digital currencies, stablecoins, and more.
“A good friend of mine always says words make worlds, and we are hoping that these words will make regulations where appropriate,” said Caroline Butler, global head of digital assets at BNY Mellon during the meeting.
Butler is also the co-chair of the GMAC’s Digital Asset Markets Subcommittee. Lawmakers in Washington have been working over the past year on bills to regulate crypto by taking a comprehensive approach, but also focusing on creating a federal framework for stablecoins. Regulators have worked on rules impacting the crypto industry, while bringing charges against crypto firms.
The industry, meanwhile, has said clarity is needed from both lawmakers and regulators on how rules and laws apply to them. The new taxonomy looks to have “consistent language for participants in the digital asset ecosystem to promote innovation, identify and address risk considerations, and enable effective regulatory understanding,” according to the panel’s presentation. The approach will build on work being done by global standard setters such as the Financial Stability Board, they said.
