Capital Markets and Technology Association (CMTA), a Swiss non-profit, has issued on Thursday common guidelines for cryptocurrency custodians in the country.
Dubbed Digital Assets Custody Standard, the primary goal of the guidelines is to clarify the difference between storing digital currencies and traditional assets.
The non-profit also believes that the custody industry needs some baseline operational and security requirements to mitigate risk exposure.
“This will greatly contribute to the emergence of fully digital capital market infrastructures, including integrated custody and secondary trading venues. The benefits of the digitalization of the financial industry are such that the evolution towards decentralized infrastructures seems inevitable,” Fedor Poskriakov, general secretary of CMTA, said.
A young yet impactful organization
The Geneva-based non-profit was formed in 2018 with an aim to promote the adoption of blockchain technology and digital assets in the financial markets.
7 Pharma Stocks You Need to Know in the Race for a Covid-19 VaccineGo to article >>
The association also believes that small and medium enterprises (SMEs) can also get help from decentralized technology as it can simplify and democratize their financial mechanisms.
CMTA also highlighted the difference between centralized and decentralized technologies and pointed out that crypto custodians need to provide higher levels of security assurance as the platforms use cryptographic technology to store assets.
With the guidelines, the non-profit is trying to secure the legal side of the Swiss crypto industry which will ultimately help it to promote the technology and services.
Meanwhile, multiple European regulators are also trying to bring frameworks for the crypto industry.
Earlier, BaFin, the financial market regulator in Germany, classified digital assets as financial instruments, and also clarified licensing procedure for crypto custodians.