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:
“If you make it impossible for regulated institutions to run services in crypto-assets, you effectively chase this business out of the institutions who know how to run it properly, and into the shadows, where it may be run by new entrants with limited experience.”
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):
“DeFi appears to operate differently [from TradFi and CeFi] but the differences are not quite as stark as they seem. […] A platform where buyers and sellers meet is, by its very nature, a central entity.”
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 … pic.twitter.com/drYRne2bZL— The Industry Spread (@industryspread) September 28, 2023
The WFE applauded Financial Action Task Force efforts to apply Know Your Customer regulations, the so-called travel rule, to crypto and endorsed the IOSCO Principles for Secondary and Other Markets to raise standards on crypto markets.
Magazine: Deposit risk: What do crypto exchanges really do with your money?
Politics
Badenoch pulls off first conference speech as leader, but it is less clear if this will be her last
There’s no question that Kemi Badenoch’s on the ropes after a low-energy first year as leader that has seen the Conservative Party slide backwards by pretty much every metric.
But on Wednesday, the embattled leader came out swinging with a show-stopping pledge to scrap stamp duty, which left the hall delirious. “I thought you’d like that one,” she said with a laugh as party members cheered her on.
A genuine surprise announcement – many in the shadow cabinet weren’t even told – it gave the Conservatives and their leader a much-needed lift after what many have dubbed the lost year.
Politics latest: Stamp duty to be axed under Tories
Ms Badenoch with her husband, Hamish. Pic: PA
Ms Badenoch tried to answer that criticism this week with a policy blitz, headlined by her promise on stamp duty.
This is a leader giving her party some red meat to try to help her party at least get a hearing from the public, with pledges on welfare, immigration, tax cuts and policing.
In all of it, a tacit admission from Ms Badenoch and her team that as politics speeds up, they have not kept pace, letting Reform UK and Nigel Farage run ahead of them and grab the microphone by getting ahead of the Conservatives on scrapping net zero targets or leaving the ECHR in order to deport illegal migrants more easily.
Ms Badenoch is now trying to answer those criticisms and act.
At the heart of her offer is £47bn of spending cuts in order to pay down the nation’s debt pile and fund tax cuts such as stamp duty.
All of it is designed to try to restore the party’s reputation for economic competence, against a Labour Party of tax rises and a growing debt burden and a Reform party peddling “fantasy economics”.
She needs to do something, and fast. A YouGov poll released on the eve of her speech put the Conservatives joint third in the polls with the Lib Dems on 17%.
That’s 10 percentage points lower than when Ms Badenoch took power just under a year ago. The crisis, mutter her colleagues, is existential. One shadow cabinet minister lamented to me this week that they thought it was “50-50” as to whether the party can survive.
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(L-R) Shadow business secretary Andrew Griffith, shadow environment secretary Victoria Atkins and shadow housing secretary Sir James Cleverly. Pic: PA
Ms Badenoch had to do two things in her speech on Wednesday: the first was to try to reassert her authority over her party. The second was to get a bit of attention from the public with a set of policies that might encourage disaffected Tories to look at her party again.
On the first point, even her critics would have to agree that she had a successful conference and has given herself a bit of space from the constant chatter about her leadership with a headline-grabbing policy that could give her party some much-needed momentum.
On the second, the promise of spending control coupled with a retail offer of tax cuts does carve out a space against the Labour government and Reform.
But the memory of Liz Truss’s disastrous mini-Budget, the chaos of Boris Johnson’s premiership, and the failure of Sunak to cut NHS waiting lists or tackle immigration still weigh on the Conservative brand.
Ms Badenoch might have revived the room with her speech, but whether that translates into a wider revival around the country is very hard to read.
Ms Badenoch leaves Manchester knowing she pulled off her first conference speech as party leader: what she will be less sure about is whether it will be her last.
I thought she tacitly admitted that to me when she pointedly avoided answering the question of whether she would resign if the party goes backwards further in the English council, Scottish parliament and Welsh Senedd elections next year.
“Let’s see what the election result is about,” was her reply.
That is what many in her party are saying too, because if Ms Badenoch cannot show progress after 18 months in office, she might see her party turn to someone else.
The UK has lifted its four-year ban on crypto exchange-traded notes, with analysts predicting the move could grow the UK crypto market by 20%.
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