According to a senior watchdog official, global market regulators are likely to establish a joint body within the next year to better coordinate cryptocurrency rules.
The rise of digital currencies like Bitcoin, according to Ashley Alder, chair of the International Organization of Securities Commissions (IOSCO), is one of the three main areas authorities are now focusing on, alongside COVID and climate change.
"If you look at the risks we need to address, they are multiple and there is a wall of worry about this (crypto) in the conversations at an institutional level," Alder said during an online conference organised by the OMFIF thinktank on Thursday.
He listed cybersecurity, operational resilience, and a lack of transparency in the crypto world as key risks on which regulators are lagging.
The spotlight has returned to crypto markets this week, amidst even more wild volatility that has long alarmed watchdogs.
The collapse of so-called'stablecoin' TerraUSD prompted the chairman of the Senate Banking Committee to call for tougher crypto regulations on Wednesday, while bitcoin has dropped nearly 20% this week.
Alder said a global group to try to align crypto rules was clearly needed, comparing it to various climate finance setups already in place, including one under the G20 group of world leaders.
"At the moment, there isn't anything like that for crypto," Alder, who is also the CEO of Hong Kong's Securities and Futures Commission, said.
"But I do think now it's seen as one of the three C's (COVID, climate and crypto) so it's very, very important. It has gone up the agenda, so I would not expect that to be the case the same time next year."