Regulation
DTIF Expands Digital Token Identifier for Crypto Derivatives Regulatory Reporting
The Digital Token Identifier Foundation (DTIF) has announced an expansion of the scope of the Digital Token Identifier (DTI) to encompass regulatory reporting on crypto asset derivatives transactions across the G20.
This development marks an important milestone in the regulation of digital assets, given that previously, derivatives reporting focused only on traditional financial instruments.
DTI was introduced as underlying two derived 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 over-the-counter derivatives markets globally and the OTC ISIN, an identifier used to detect and investigate market abuse.
According to the DTIF, the inclusion of DTIs as underlyings to both UPI and ISIN OTC will enable greater transparency in the crypto derivatives trading market, helping public authorities identify risk related to digital assets on a global scale.
The adoption of ISO 24165 DTI also highlights the regulatory commitment to establish a globally recognized identification standard for the developing market for financial instruments referenced to crypto-assets.
Since April 29 this year, crypto-derivatives falling under the European Market Infrastructure Regulation (EMIR) must use a DTI as an underlying to OTC UPIs and ISINs reported to a central repository. The use of DTI allows EU supervisory bodies to extend oversight of derivative risks to digital assets.
This expansion of the scope of the DTI will enable more efficient reporting and identification of digital asset underlyings for derivatives products. The DTI list is expected to expand to enable greater scalability and flexibility for OTC UPI and ISIN generation in the long term.
Sassan Danesh from DTIF said: “This marks the successful launch of DTI in the EU for crypto-derivatives risk monitoring.
Looking ahead, we are expanding the use of DTI across all G20 jurisdictions, including the UK, Australia and Singapore later in 2024 and Japan in early 2025.”