Numbering Association Starts Work on Crypto Identifiers

The Association of National Numbering Agencies (Anna)—the global body that oversees issuers of standardized instrument codes—has established a member task force that will work on harmonizing standards for the identification of crypto assets.

Anna’s managing director, Emma Kalliomaki, says the organization is responding to an increasing number of requests from market participants who want to know where they can obtain International Securities Identification Numbers (Isins) for assets such as securitized tokens and cryptocurrencies.

Anna is the registration authority for the Isin code, an International Standards Organization (ISO)-approved identifier for securities. The Isin is mandated for use in trade and transaction reporting under regulations including Mifid II, among other uses.

The task force has already conducted its first meeting, Kalliomaki says. 

“It now has to assess what actions we need to take to make sure that the Isin standard and the role of implementation and adoption by the numbering agencies is covered in the Anna guidelines and is a harmonized and consistent approach to how we are going to start issuing Isins” for these assets, she says.

The task force will begin its work by determining the scope of the instruments that fall within its purview, before turning to the issue of jurisdiction. Isins assigned to securities such as debt and equities are jurisdiction-based, meaning the agency that assigns the Isin is the one based in the territory where the security is issued.

However, with crypto assets “there is a quirk: these assets don’t fall into the traditional rules of Isin assignment,” Kalliomaki says. Cryptocurrencies have no issuers and are not associated with particular countries, so it is unclear which numbering agency would generate and assign the codes in each case.

“[We are asking] what rules should we apply, especially in cases where we want to have a consistent identifier,” she says.

Isins are already being assigned to securitized tokens. Debt issued on a distributed ledger, for example, is eligible for an Isin. 

“But even with securitized tokens, the same issue still applies: we still need to make sure that there is consistency and harmonization in the approach, and that has to be put into the Isin guidelines to make sure that all numbering agencies are following a common method in how they assign Isins to those types of instrument,” Kalliomaki says.

The task force could look no further than Anna itself for inspiration on the jurisdiction issue. Isins for over-the-counter derivatives are not generated by numbering agencies in individual countries, but rather by a centralized body, the Anna Derivatives Service Bureau (DSB).

“The difference is that crypto assets at the moment are a much smaller asset class [than OTC derivatives]—though it is evolving so quickly,” Kalliomaki says.

“But with the DSB, we definitely have a model that works. Whether that is something we need to consider for the non-jurisdiction digital assets is, I’m sure, something that will be considered as part of the task force.”

These codes are needed to identify derivatives of which a cryptocurrency is the underlying asset, both for regulators and for the participants in these contracts, she adds.

“So the implications are big. When you move into the derivatives space, you have a lot of instruments in which we need consistency and harmonization of how those underliers are represented.”

Participation in the task force is currently limited to the numbering agencies that make up Anna’s membership, but Kalliomaki says it will engage with market participants and regulators as it makes decisions.