WFE publishes research on exchange engagement with crypto market
05 September 2023 UK
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The World Federation of Exchanges (The WFE) has published the first of a two-part research paper in which it analyses exchange engagement with crypto market developments.
The federation published the paper — entitled “A review of crypto-trading infrastructure” — to highlight the benefits and risks of crypto market infrastructures and how they function.
The WFE’s research shows that the risks that unregulated crypto-trading platforms bring are compounded by the fact that they frequently carry out further activities that would not be permitted, or would be closely regulated, in mainstream public markets.
The paper outlines how demand for crypto-related products and services is changing, and how regulated exchanges are responding to the opportunities and challenges posed by these technologies. One response is the creation of regulated crypto-trading exchanges or the provision of crypto-related services.
Dr Pedro Gurrola-Perez, head of research at the WFE, comments: “There is a growing demand for crypto products and services. Crypto-related innovations are seen as an opportunity to advance technology development and increase investor choice. However, the lack of minimum governance and investor protection standards of unregulated crypto platforms, as well as the high volatility observed in these markets, and the risk of cybersecurity threats, is a concerning mix.”
Nandini Sukumar, CEO of the WFE, adds: “Crypto is at the forefront of all of our members’ minds and we are in constant dialogue with them about how to capitalise on the new opportunities in the area. As this industry and market matures, coming into the mainstream of financial markets, the exchange-traded model which places investor trust, transparency, accountability and investor protection at the heart of the platform, will gain further momentum.”
The federation published the paper — entitled “A review of crypto-trading infrastructure” — to highlight the benefits and risks of crypto market infrastructures and how they function.
The WFE’s research shows that the risks that unregulated crypto-trading platforms bring are compounded by the fact that they frequently carry out further activities that would not be permitted, or would be closely regulated, in mainstream public markets.
The paper outlines how demand for crypto-related products and services is changing, and how regulated exchanges are responding to the opportunities and challenges posed by these technologies. One response is the creation of regulated crypto-trading exchanges or the provision of crypto-related services.
Dr Pedro Gurrola-Perez, head of research at the WFE, comments: “There is a growing demand for crypto products and services. Crypto-related innovations are seen as an opportunity to advance technology development and increase investor choice. However, the lack of minimum governance and investor protection standards of unregulated crypto platforms, as well as the high volatility observed in these markets, and the risk of cybersecurity threats, is a concerning mix.”
Nandini Sukumar, CEO of the WFE, adds: “Crypto is at the forefront of all of our members’ minds and we are in constant dialogue with them about how to capitalise on the new opportunities in the area. As this industry and market matures, coming into the mainstream of financial markets, the exchange-traded model which places investor trust, transparency, accountability and investor protection at the heart of the platform, will gain further momentum.”
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