The WFE asked the Financial Stability Board, and other international standard-setting bodies, to create a global taxonomy to drive a common understanding of whether a global stablecoin or cryptoasset fits a certain classification or definition.

"This would reduce the variance between jurisdictions and curb regulatory dissonance. A periodic review of the taxonomy would ensure that forms of GSC and crypto-assets, which have matured and may constitute a new, viable and commonly used product, can be incorporated and regulated accordingly," the WFE said.

The organisation also wants regulators to share information on global stablecoins and cryptoassets and on their issuers and the platforms on which they are traded,

"Without formalised co-ordinated approaches to enforcement and oversight in general, issues around market integrity and consumer protection will not be fully addressed," the WFE said.

The response outlines the importance of the roles of the exchange and CCP in the trading and clearing of derivatives contracts, bringing societal benefits as well as opportunities for individual market participants.

It notes that established exchanges offer a venue whereby exchange-traded and centrally cleared derivatives are subject to pre- and post-trade standards, set by the exchange listing and the CCP clearing the trades.

The WFE therefore welcomed the proposal that established regulated market infrastructure would be recognised by MAS as the appropriate market operators to conduct, and instil, the high standards required for the trading of cryptoasset-based derivatives contracts. It recommended, however, that there is specific inclusion and greater clarity on how third-country recognition processes might function to enable third-country market infrastructure to trade said payment token derivatives.

While recognising the MAS’s concerns with the suitability of trading payment token derivatives for retail investors, the WFE encouraged the MAS to keep the restrictions placed on trading with retail investors under review as the market evolves and matures in the stability of its trading environment. This would also enable the MAS to respond to and adopt any forthcoming global regulatory approach to cryptoasset regulation.

The WFE also suggested that trading platforms which do not fall within the high regulatory standards associated with established market infrastructure should be banned or restricted from offering payment token derivatives products to institutional or retail investors, to ensure greater investor protection, and to avoid undermining the additional processes, safeguards and extra investment required by WFE members, due to their systemic importance as central market infrastructure.