The World Federation of Exchanges (WFE), a global industry group for exchanges and central counterparty clearing houses (CCPs) has called for a response to the growth of stablecoins by developing a common taxonomy that would also cover cryptoassets.

The industry body said the taxonomy - a means of classifying a group of assets through common characteristics - would create consistent and common regulatory classifications before the stablecoin ecosystem fragments further; rather than trying to fix differences after the fact.

The call comes as Facebook continues to forge ahead with plans to launch its Libra stablecoin, despite regulatory concerns raised by lawmakers and governments around the world.

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

This, the WFE argued, would reduce the variance between jurisdictions on regulatory matters.

A periodic review of the taxonomy would ensure that forms of a global stablecoin and cryptoasset can be incorporated and regulated accordingly.

Regulators should cooperate to share information on global stablecoins and crypto-assets and also on their issuers and the platforms on which they are traded, the WFE said.

Nandini Sukumar, chief executive officer of the WFE, said: “We support the overall ambition of seeking to address fragmented regulatory approaches by moving to an outcomes focus, applying the ‘same business, same risk, same rules’ principle; and building on the need for cross-border co-operation in the supervision of global stablecoin, both for wholesale and retail.”

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