The World Federation of Exchanges (WFE) has highlighted the potential for crypto-asset trading platforms (CTPs) to have a significant impact on the economy and society. In a recently released paper, the WFE stressed the importance of regulation for CTPs in order to enhance the appeal of their markets. The trade association proposed six principles for regulating CTPs, including the segregation of functions to prevent trading against customers. Until these standards are met, CTPs should refrain from using the term “exchanges.”
The WFE’s paper emphasizes the need for regulation as a means to strengthen CTPs and their role in the real economy. By implementing effective regulatory measures, CTPs can enhance trust and credibility within the market. The WFE specifically highlighted the importance of segregating functions to address the common concern of trading against customers. These regulatory measures aim to promote fair and transparent trading practices, ultimately bolstering the appeal of CTPs.
In light of the proposed principles, CTPs are urged to prioritize regulatory compliance and refrain from referring to themselves as exchanges until they meet the required standards. The WFE’s recommendations emphasize the crucial role of regulation in shaping the future of crypto trading platforms. By adhering to these principles, CTPs can foster an environment that supports the growth and integration of cryptocurrencies into the traditional financial system.