Regulated exchanges are hesitant on cryptocurrency despite growing demand
Date: 2023-09-05 Author: Karina Ziganova Categories: BLOCKCHAIN, BUSINESS
Regulated stock exchanges continue to be reluctant to provide unregulated cryptocurrency products despite rising investor demand, according to a report released by the World Federation of Exchanges on September 5.
This report is based on a survey of 29 regulated stock exchanges that are part of the WFE. They also include Nasdaq and CM E Group. Among retail and institutional investors, he noticed an increased interest in crypto-currency assets such as bitcoin. However, significant risks prompt regulated exchanges to think.
The report reads:
“Also, when considering the option of entering the crypto markets, there are concerns, in particular, about the lack of uniform regulatory standards and the high volatility of these markets, and the risk of cybersecurity threats.
About 40% of survey respondents have already begun to offer some products, one way or another related to cryptocurrency. These include derivatives and stablecoins - currencies pegged to state currencies. More than 41% without current cryptocurrency offerings have declared their intention to implement them.
However, regulated exchanges still face obstacles more often than they benefit. Cyber security, high volatility and operational issues were considered the most notable risks. Technological progress, new sources of income and technological leadership were considered the most common advantages.
One of the main problems that stood out was the lack of consistent government oversight. All interviewees noted that regulation is a major barrier to the supply of crypto assets.
Despite this, in many jurisdictions, cryptocurrency trading platforms operate without the proper standards required from established forex markets and with very little regulatory oversight. “As these markets continue to grow, there is no doubt that this will have a negative impact.”
The previously mentioned collapses of major crypto platforms such as FTX and the TerraUSD stablecoin have greatly increased calls for increased oversight. The report claims that previous cryptocurrency crashes have been “a wake-up call for regulators. They want to increase the attention of the regulatory authorities.”
While investor enthusiasm for cryptocurrencies remains very strong, the report concluded that there should be more government restrictions on digital currency trading platforms. It also states that uniform standards can strengthen the confidence of regulated institutions regarding their cryptocurrency offerings.
The report states that when considering options for entering the cryptocurrency markets, there are also concerns regarding the lack of uniform regulatory standards and the high volatility of these markets, as well as the risk of cybersecurity threats.
