World Federation of Exchanges Says Crypto Terminology Needs Clarity
The World Federation of Exchanges has called for clarity around crypto terminology and its related implications for regulation.
Responding to crypto-related regulatory framework from the European Union, the World Federation of Exchanges, or WFE, called for clarity between digital asset and crypto asset classifications.
“We believe there could be value in adopting a single EU classification which covers both: digital-assets and also crypto assets, as a subcategory,” the WFE wrote in response to questions posed in a March 20 report.
A new industry charts murky waters
Blockchain and crypto have only been around for just over a decade, so terminology and regulation surrounding the space is still developing. At present, the public labels Bitcoin, stablecoins and other assets as anything from digital assets to magic internet money.
Regulation around this new industry has also faced similar uncertainty. In the WFE’s write-up, the organization referred to these as crypto assets, to avoid confusion.
The WFE references global application
The document noted the WFE wants its crypto terminology to adapt to global industry changes and rulings. The WFE wrote:
“Whilst a more universal classification would be welcome in the crypto asset taxonomy, it will be important to consider this in an internationally applicable manner and to have the suitable flexibility within that classification to mould to international classifications as they develop.”
The organization said that such clarity would improve EU collaborations within itself, as well as across other regions worldwide.
“It is important that definitions should aim to facilitate greater clarity on the types of asset that already fall within the regulatory perimeter and the type of platforms where they are available,” the WFE said, emphasizing the importance of avoiding technical terms that may rapidly become outdated.
The organization also said that the terms chosen should carry the related regulatory guidelines behind them.
The subject of standardizing the language of cryptocurrency has seen a great deal of interest around the world. In the United States, a congressman recently introduced a bill proposing a comprehensive scheme to divide all digital assets into three categories.
The WFE pushed against the banning of crypto derivatives trading, which the United Kingdom’s Financial Conduct Authority, or FCA, considered restraining in 2019.
Cointelegraph reached out to the WFE for additional details but received no response as of press time. This article will be updated accordingly should a response come in.