Global market regulators are likely to launch a joint body within the next year to better co-ordinate cryptocurrency rules, a senior watchdog official has said.
Ashley Alder, chair of the International Organization of Securities Commissions (IOSCO) said the boom in digital currencies such as Bitcoin was one of the three main areas authorities were now focused on, alongside COVID-19 and climate change.
"If you look at the risks we need to address, they are multiple and there is a wall of worry about this (crypto) in the conversations at an institutional level," Alder said during an online conference organised by the Official Monetary and Financial Institutions Forum (OMFIF) think tank on Thursday.
He cited cyber security, operational resilience, and a lack of transparency in the crypto world as the key risks that regulators are lagging behind on.
Focus on crypto markets has intensified again this week amid more wild volatility that has long-alarmed watchdogs.
The collapse of so-called 'stablecoin' TerraUSD saw the chairman of the Senate Banking Committee on Wednesday urge US lawmakers to toughen up crypto regulations, while Bitcoin has also slumped nearly 20 per cent this week.
Alder said a global group that tried to align crypto rules was clearly needed, likening it to various set-ups already in place for climate finance, including one under the G20 group of leading economies.
"There isn't anything like that for crypto at the moment," said Alder, who is also CEO of Hong Kong's Securities and Futures Commission.
"But I do think now it's seen as one of the three C's (COVID-19, climate and crypto) so it's very, very important. It has gone up the agenda, so I would not expect that to be the case the same time next year".