Tags to identify Bitcoin, Ethereum and other cryptoassets will launch in September, the latest sign of a fast-growing, unregulated market taking on a popular trend.
The ability to control cryptocurrencies has become a major concern for regulators as the burgeoning market, which reached a record $ 2 trillion capitalization in April, raised central bank concerns about high volatility.
Certain shares and derivative financial instruments have already been assigned a unique identification number, which allows regulators and market participants to identify, track and quantify the risks of transactions.
The new Digital Token Identifiers, or DTIs, will be registered with the non-profit arm of the Etrading Software DTI Foundation, a fintech company that develops market infrastructure.
As the crypto asset sector grows in size, regulators and the market will need identifiers to better track it, according to Etrading Software Managing Partner Sasan Danesh.
DTI will create a bridge between traditional securities and a new tokenized world using the global International Organization for Standardization (ISO) regulations to be agreed by the end of September.
The DTI Registry will officially issue identifiers for the 100 most important cryptoassets and tokens that make up over 80% of the current cryptocurrency market, including Bitcoin, Ethereum, Dogecoin, and XRP.
Identifiers will also make it easier to compare which crypto exchanges offer the best prices for certain cryptoassets.
ISO-based identifiers are already being used to communicate securities and derivatives transactions to regulators, thereby identifying market abuse and mitigating risks. Danesh believes that DTI will impose similar requirements for cryptocurrency transactions.
“We are absolutely confident that the regulatory mandate for digital asset reporting will be determined only by the size of the digital market, which can no longer be ignored by regulators ,” added Danesh.
According to him, taking into account the time required for the introduction of DTI into the markets, the end of 2023 is the most realistic date for the introduction of mandatory reporting.
Major investor IT systems are already referencing ISO-based identifiers, and the addition of a DTI will require significant work. And it will make it easier to add digital assets.