The Digital Token Identifier Foundation (DTIF) has announced an expansion to the scope of the Digital Token Identifier (DTI) to encompass regulatory reporting of crypto asset derivative trades across the G20.
The development marks a milestone for the regulation of digital assets, given that beforehand, derivatives reporting solely focused on traditional financial instruments.
The DTI has been introduced as an underlier to two derivative identifiers. Namely, the Unique Product Identifier (UPI) and the International Securities Identification Number for OTC derivatives (OTC ISIN).
The UPI is a G20 mandated identifier for derivatives reporting, helping regulators identify the build-up of systemic risks in OTC derivatives markets globally and the OTC ISIN, an identifier used to detect and investigate market abuse.
Including DTIs as underliers to both the UPI and the OTC ISIN will allow for greater transparency in the crypto derivative trading market, supporting public authorities in identifying digital asset risk globally, according to the DTIF.
Adopting the ISO 24165 DTI standard also emphasises the regulatory commitment to establishing a globally recognised identification standard for the developing market of crypto-asset-referenced financial instruments.
As of 29 April this year, crypto-derivatives falling under the EU’s European Market Infrastructure Regulation (Emir) need to use a DTI as an underlier to the UPIs and OTC ISINs reported to a trade repository. The use of DTI allows EU watchdogs to extend the monitoring of derivative risk to digital assets.
This expansion of the DTI scope will allow for more efficient reporting and identification of digital asset underliers for derivative products. The DTI list is expected to grow to allow for increased scalability and flexibility for UPI and OTC ISIN generation in the long run.
DTIF’s Sassan Danesh, said: “This marks the successful launch of the DTI in the EU for monitoring of crypto-derivative risk.
Looking forward, we are extending the use of the DTI across the G20 jurisdictions, including in the UK, Australia and Singapore later in 2024 and Japan in early 2025.”
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