Exchanges federation touts crypto trading regulation, integration with TradFi
The World Federation of Exchanges (WFE) sees the potential for crypto-asset trading platforms (CTPs) to play a larger role in the “real” economy and society at large. It had some blunt observations about CTPs and suggestions for regulators in a paper released Sept. 28.
“CTPs should welcome a degree of regulation as a mean[s] to bolster the appeal of their markets,” the WFE wrote. It suggested six principles for regulating CTPs. The first of those was to segregate functions to avoid trading against their customers, a complaint that United States Securities and Exchange Commission chairman Gary Gensler often voices. Until they meet those standards, CTPs should not call themselves exchanges, the trade association said.
The WFE was concerned about the integration of distributed ledger technology (DLT) into the TradFi exchanges it represents. Regulators should consider the mutual advantages of that integration, it said:
FTX experienced a “classic financial services collapse” that was not related to the crypto industry itself, the WFE said.
Related: 40% of crypto trading platforms are decentralized: World Federation of Exchanges
It had much to say about decentralized finance (DeFi):
For example, the Ethereum Merge – its transition from proof-of-work to proof-of-stake consensus – “was largely driven by the centralised team at the Ethereum foundation.” Regulation could be applied on the level of DApps, not the protocol, the WFE suggested.
World Federation of Exchanges proposes 6 key principles for crypto trading infrastructure -
“These six key principles should be a checklist for any CTPs that are serious about meeting the standards expected of a credible operator of markets. Observing the standards will not ...
