The Association of Investment Professionals (CFA Institute)in a report addressed to both regulators and institutional investors, recommended regulating stablecoins due to the risk they represent for the financial system.
According to the CFA, stablecoins create links and ramifications with traditional financial markets, so they can pose a systemic risk to financial stability if not properly monitored.
In this sense, the Europa Press news agency reported that within the report They recommended that legislators reach a consensus within the international legal framework in order to agree on definitions and supervision programs that take into account the specific nature of crypto-asset services, in addition to determining whether crypto assets are securities, other forms of financial instruments, commodities, or currencies.
Regulation of crypto custody
On the other hand, d.They demanded that the custody of crypto assets should be regulated and secure, in a way that cryptocurrency platforms and companies do not use client assets to finance their own businesses even if the platform or company goes bankrupt.
Olivier Fines, Head of Regulatory Affairs for EMEA at CFA InstituteHe mentioned the following: “The recent debacle at FTX shows the harm that investors and platform participants can suffer when their assets are not kept safe. The FTX example underscores the importance of custody issues and the responsibility of investors to base their decisions on rigorous investment analysis, and not on fashion and speculation.”
That being said, toSome of the other advice and recommendations they left for institutional and fiduciary investors in their report included the following: avoiding fashion and speculation, applying the basic principles of portfolio construction, determining the chain of custody and security of client assets in the case of trustees, and carrying out a careful analysis of the sustainability of the business model and customer acquisition strategy, among others.
Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
It may interest you:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.