The International Organization of Securities Commissions’ (IOSCO) Wednesday proposal of new standards for the crypto sector has been welcomed by industry stakeholders, but they are unsure of how the rules would look in practice.

The 18 recommendations of the regulator for the crypto industry are a wide range of topics, including market abuse and conflict of interest. They also cover consumer protection and other issues.

The regulatory approaches taken by regulators around the globe have been diverse. They range from outright prohibitions in places like China, and legal crackdowns in America, to licensing regimes such as the Markets in Crypto Assets Regulation (MiCA), in the European Union.

Crypto stakeholders are pleased to see the development of universal standards in this sector.

In a press release, Antoni Trenchev said that the new blueprint by IOSCO was a boost for regulators around the world to move toward a more harmonized regulatory system.

Haydn Jones is the global leader of Blockchain and Crypto solutions at financial advisor Kroll.

Jones stated in a press release that “putting in place frameworks for this is an important step to protect against criminal activities, but also allow everyone to benefit from the technology that cryptocurrency relies on.”

In an email to CoinDesk, Chris Woolard, an expert in regulations at blockchain platform EY said that the recommendations will also help create “a baseline of cross-border standards on which can be built.”

In Practice

Woolard says that while cross-jurisdictional cryptoregulation is long overdue, it remains to be seen how effective this will be.

Some traditional financiers may need convincing as well. They have retreated from the crypto market following last year’s dramatic collapse.

In a recent statement, Rajeev Bamra (senior vice president of Moody’s Investors Service) said that although the goal of the proposed recommendations was to integrate the crypto-sector into mainstream finance in a safe manner, it is still unclear what the actual consequences and implementation will be.

Bamra said that they have the potential to significantly influence the regulation and supervision of the crypto industry.

Bamra noted that IOSCO recommendations, led by the U.K. Financial Conduct Authority as part of global body’s Fintech Task Force, did not include decentralized finance , which will be examined separately by the U.S. Securities and Exchange Commission.

Bamra stated that DeFi standards, when released, could “help increase investor confidence, reduce exposure to risk, and encourage more consistency regulation” across jurisdictions. Chris Perkins of investment firm CoinFund, the president and managing director, commended IOSCO on not “commingling DeFi” in its policy document covering crypto asset services providers.

There will always be tension between governments and the crypto market because of the decentralized nature of crypto, which is a technology that sits above traditional jurisdictional boundaries, takes risks, and pushes technological boundaries. Will Charlesworth, a crypto assets partner with U.K. based Keystone Law, said: “Governments want to implement regulations in order to protect consumers.”

IOSCO is accepting public comments on its recommendations until 31 July.

Read more: International Securities Regulator IOSCO Makes Policy Recommendations on Crypto

Aoyon A. Ashraf is the editor.