Bitcoin. CMA has warned investors against taking part in initial coin offerings. file photo | nmg
The Capital Markets Authority (CMA) is pushing for creation of a
special unit comprising financial sector watchdogs to regulate the use
of cryptocurrency, citing high risks associated with the Internet-based
digital currencies.
Already, CMA has warned investors against taking part in initial coin offerings (ICOs).
The
authority says the ongoing offerings are unregulated and speculative
investments with considerable risk exposure to the investor.
“There
is need for regulators to devise a common approach towards handling
issues revolving around cryptocurrencies and initial coin offerings.
“A joint work group by financial sector regulators could be put
in place to tackle issues around cryptocurrencies/ICOs,” CMA said in its
latest Capital Markets Soundness Report.
The
authority said regulators need to communicate willingness to
accommodate financial technology to remove the perception that they are
hesitant to appreciate new innovations.
“There is room
to develop international regulatory principles for crypto assets
including ICOs. The goal should be to harness the potential of the
underlying technology,” said Luke Ombara, director, regulatory policy
and strategy.
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