Global Digital Finance (GDF), a new cryptocurrency industry body, has officially been launched, with the aim of creating a comprehensive global code of conduct, which will protect market participants from any unlawful misuse of blockchain technology.
The establishment of the GDF, is extremely important to the longevity of the crypto industry, as more countries continue to warn of the potential risks associated with the newest investment avenues in global financial markets.
Due to their nature of being a global asset, it becomes even more critical to create a global code of conduct, which will induce a shared understanding of the opportunities, risks and practices, that are brought forth by cryptocurrencies.
As blockchain technologies continue to be developed, which offer innovative solutions to some of the world’s obstacles, it is important to find a way to harness these benefits, while limiting the risk factors that are associated with the highly fluctuating prices of digital assets.
Countries such as China and South Korea, have been more stringent in their approach toward the crypto industry, issuing bans of ICOs and crypto exchanges, while others are contemplating the measures to promote the safe and regulated environment, necessary to ensure the longevity of digital assets.
The finance ministers central bank governors Germany and France, are pushing for cryptocurrencies to be handled ahead of the upcoming G20 meeting.
The GDF is said to already be working with the US and European countries, toward their goals of making the global code of conduct a reality.
The cryptocurrency craze might have taken a step back in recent months, in response to a slumping market, that has been dramatically influenced by global governments and regulators, in an attempt to curb the previously fast growing demand for digital assets, as forms of investments. However, the downturn in crypto prices is likely more of a speedbump, than a complete dismantling of the industry.
The new global code of conduct will produce an outline for the way in which all digital assets areto be handled, including Bitcoin (BTC) or Ethereum (ETH), and various types of tokens, including Payment tokens, asset tokens, and utility tokens.
Commenting on the establishment of the GDF, Simon Taylor, a distributed ledger and cryptocurrency specialist who leads the GDF initiative said: “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.”
As the GDF continues to tackle some of the obstacles that have hindered the industry’s development, it is facing the following issues among others, and has already emphasized ICOs as a major area of focus.
The first issue is reaching a common agreement as to the nature of tokens, and monitoring the financial stability of tokens, as more investors are exposed to them through ICOs and exchanges.
Moreover, the GDF is alsdo striving to offer more protection for what are considered “vulnerable” investors, as risk factors remain one the leading concerns for global regulators. Establishing a commonly adopted framework for Anti Money Laundering (AML) and Counter Terrorism Financing (CFT), are also at the forefront of the GDF’s agenda.
The GDF is also using the OECD’s work as a blueprint, in an effort to encourage a coordinated policy approach from governments. Greg Medcraft, Director of the Directorate for Financial and Enterprise Affairs at OECD, says “Cryptoasset applications like ICOs hold clear potential and are global in reach, but are subject to a wide range of regulatory treatments across jurisdictions. This demonstrates the need for international policy coordination, and the first step is to establish a common understanding.”
He added: “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.”
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