Step in line, crypto platforms. Global Digital Finance (GDF) has launched to drive a code of conduct for cryptoassets. Non-profit GDF has convened key stakeholders to develop a global code of conduct and a taxonomy for cryptoassets, comprised of global distributed ledger and cryptoasset space leaders. Global in nature, cryptoassets require a shared understanding of opportunities, risks and practices to be transformative for financial services, society and the global economy.
Simon Taylor leads the GDF initiative. Taylor, who co-foundered @11FSTeam, indicated key industry players in the space are keen to demonstrate their collective position on improving standards through a professional code of conduct for the industry, and to develop this in collaboration with global regulators:
“There have been a number of positive initiatives to bring standards to the cryptocurrency sector around token sales (also known as ICOs) and tokens, and GDF has brought together some of the biggest industry players and influencers to move this agenda forward with global policy makers and regulators.”
GDF has been launched to convene both the cryptoassets industry and financial services professionals to build a path to the efficient fair transparent markets for every type of token (DLT or cryptoasset). Working with industry leaders, GDF is developing a global Code of Conduct for cryptoassets and “tokens”. The Code of Conduct is envisioned to apply to a broad range of cryptoassets, including Bitcoin or Ether, and various types of “tokens” (e.g. Payment token, Asset Tokens and Utility Tokens as described by the recent guidance from the Swiss regulator FINMA).
With an estimated market size of $500B USD, the visibility of cryptoassets and the potential of continuing innovation appear to offer many new and different opportunities for consumers, businesses and governments. Many professionals in financial markets see “tokens” and distributed ledger technology bringing significant potential value to create efficient, fair and transparent market structures in the coming decade.
Without the timely development of standards and coordination, GDF avers the the obvious recognition by both industry and regulators that misuse and misrepresentation of this transformative tech may increase. The finance ministers and central bank governors of France and Germany called for the policy and monetary implications of cryptocurrencies to be placed on the agenda of the upcoming G20 meeting of the largest advanced and developing economies.
GDF, already working with US and European regulators and industry bodies to build a token and cryptoasset global framework, remains committed to further policymaker, regulator and industry outreach, as well as a transparent, inclusive and global consultative process. GDF is engaging with the OECD’s work promoting a coordinated policy approach from governments.
“Cryptoasset applications like ICOs hold clear potential and are global in reach, but are subject to a wide range of regulatory treatments across jurisdictions,” OECD Director of the Directorate for Financial and Enterprise Affairs Greg Medcraft. “This demonstrates the need for international policy coordination, and the first step is to establish a common understanding. We welcome GDF’s initiative to develop a taxonomy and a Code of Conduct, and the OECD looks forward to collaborating with industry on these priorities.”
The industry body will start with the development of a global code of conduct for cryptoassets with heightened attention to the Initial Coin Offering or token markets. The token sale market to date is estimated to have generated proceeds of up to $6B USD and is the subject of focus for many global policy makers and regulators.
GDF has identified the following issues as the “most urgent challenges in this evolving and innovative area”:
- The need for a common understanding on the nature of tokens, including how distributed ledgers or cryptoasset innovations may utilise them
- Monitoring the implications of the increasing exposure of market participants to tokens in terms of financial stability and market integrity
- Offering better protection to potentially vulnerable investors
- Adopting a common approach in Anti Money Laundering and Counter Terrorism Financing
In a recent tweet Simon commented, “So @Europol say €2/3bn is laundered via crypto. If a €500bn market that’s 0.5% Compared to an estimated $2trn of money laundering in wider financial services this is tiny and much easier to detect / prevent.” Taylor has enlisted the support of Lawrence Wintermeyer, the former CEO of Innovate Finance and current Elipses Co-Founder & Principal, and Jeff Bandman, formerly of the US Commodity Futures Trading Commission and current Bandman Advisors Founder & Principal in the GDF venture.
GDF aims to have a draft Code of Conduct available in Q2 2018 for wider industry review and consultation, with a goal of adoption in the second half of year. This work will be accompanied by development of and consultation on a taxonomy document to promote shared understanding of relevant terminology, as a foundation for the Code of Conduct.