Asset Tokenization Draws Focus From Global Securities Watchdogs

IOSCO, the international securities regulatory body, announced on Friday its focus on tokenization as part of its strategic plan for the year.

The project will draw upon the established guidelines for crypto from IOSCO’s FinTech Task Force, with a particular emphasis on tokenization applications relevant to securities and distributed ledger technology. The resulting analysis will inform IOSCO as to whether additional regulatory actions may be necessary, in line with their strategy.

The goal of this project is to foster agreement amongst IOSCO members regarding the implementation and applications of asset tokenization in the securities industry.

Regulators and financial institutions are increasingly embracing the process of converting real-world assets into digital form, known as tokenization. Notable strides in this direction include a recent tokenization initiative led by a consortium of central banks, as well as a U.K. government-supported report urging businesses to implement their tokenization plans. Major players in the investment sector, such as Blackrock, have also joined the fray, and the value of tokens like ONDO has surged with each new development.

IOSCO has given significant attention to cryptocurrencies. In November, they released their final recommendations for the sector, followed by decentralized finance guidelines in December. IOSCO’s strategy for implementing crypto-assets was also endorsed during the winter months. By the second half of this year, they intend to create an evaluation framework. An updated report on investor education regarding crypto assets for retail investors is scheduled for release this year.

According to IOSCO’s new strategy, they plan to examine some of the difficulties that arise from the use of artificial intelligence.