GDF to Set Global Standards for Cryptoasset Market

Global crypto industry association GDF (GBBC Digital Finance) has issued a consultation on a set of global principles intended to promote a "robust, fair, liquid, open, and appropriately transparent" market for cryptoassets.

By issuing the Global Cryptoasset Standards, the GDF aims to enable market participants to confidently and effectively transact at competitive prices that reflect available market information and in a manner that conforms to acceptable standards of behaviour, supported by resilient infrastructure.

The standards are designed to apply to a diverse array of participants who engage in cryptoasset markets in different ways and across various products. They are applicable to sell-side and buy-side entities, liquidity providers, operators of cryptoasset trading venues, and other centralised entities – namely large financial institutions, providing brokerage, execution, and settlement services.

In designing the standards, the GDF has leveraged the framework and high-level principles existing in the FX Global Code. In certain instances, the standards include principles referenced in the FX Global Code without material revision, as they are directly analogous, applicable and appropriate in a cryptoasset context.

In other instances, the GDF makes substantive revisions to principles in the FX Global Code to address risks specific to cryptoasset markets. The standards also established a number of new principles to account for unique risks in cryptoasset markets.

The standards are organised around six principles:

• Ethics: Market participants are expected to behave in an ethical and professional manner to promote the fairness and integrity of the cryptoasset market.

• Governance: Market participants are expected to have a sound and effective governance framework to provide for clear responsibility for and comprehensive oversight of their cryptoasset market activity and to promote responsible engagement in the cryptoasset market.

• Execution: Market participants are expected to exercise care when negotiating and executing transactions in order to promote a robust, fair, open, liquid, and appropriately transparent cryptoasset market.

• Information Sharing: Market participants are expected to be clear and accurate in their communications and to protect confidential information to promote effective communication that supports a robust, fair, open, liquid, and appropriately transparent cryptoasset market.

• Risk Management and Compliance: Market participants are expected to promote and maintain a robust control and compliance environment to effectively identify, manage, and report on the risks associated with their engagement in the cryptoasset market.

• Confirmation and Settlement Processes: Market participants are expected to put in place robust, efficient, transparent, and risk-mitigating post-trade processes to promote the predictable, smooth, and timely settlement of transactions in the cryptoasset market.

Similar to the FX Global Code, the standards include a "Statement of Commitment" form, allowing market participants to voluntarily sign up.

The Global Cryptoasset Standards are now open for comment.

Source: Regulation Asia