Authorities in different parts of the world are defining their framework for regulating Initial Coin Offerings, but such an approach will lead to disparity in the long run according to a new document released on January 15, by the Organisation for Economic Cooperation and Development (OECD).
OECD, an intergovernmental economic organization, wrote in the report that both ICO investors and startups (SME’s) would be better off if global regulators decide to join hands in creating regulations for the innovative fundraising model.
A global framework would among many things “allow ICOs to deliver their potential for the financing of blockchain-based SMEs [small and medium enterprises], while adequately protecting investors.” the report explained.
Six core benefits of ICOs as stated in the report includes:
Unlimited investor pool
Inclusive SME financing
Ownership not necessarily conferred
Flexibility, speed, and liquidity
Value of network
Another section stressed that regulators need to exercise care when drafting any potential law for ICOs. The reason is, so they don’t end up with “depriving the ICO mechanism of its speed and cost benefits, particularly when it comes to smaller size offerings.”
The OECD also made recommendations similar to that of G20 member nations in December, which is that Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) rules be transferred to blockchain and crypto service providers.
Around the world, the topic of ICO regulation has gathered momentum as authorities continue to admit its potential but can’t figure out how to bring it under control.
Even regulators in the U.S continue to debate how the new asset class should fit in, although the Securities Exchanges Commission (SEC) practically decided to ignore public comments and put almost all ICO tokens in the same category as traditional securities.
However, in the midst of the global disagreement, few nations such as Belarus, Malta, Thailand, Switzerland and more recently Malaysia has stipulated regulatory frameworks for the industry.