The Role of Exchanges in the Democratization of Digital Assets

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Cryptocurrency exchanges are increasingly integrating themselves into the financial market, and some say they could completely take it over.  While other professionals disagree, it’s certain that blockchain is disrupting the market.  Zahreddine Touag, Head of Trading at Woorton, led a panel with 4 industry experts to discuss how exchanges are democratizing digital assets and what this means regarding regulations, collaborations, and innovation in the space.  

The panel consisted of the following professionals: 

• Wei Zhou, CFO of Binance
• Rahul Khanna, CEO of Bithumb
• Yoni Assia, CEO and Founder of eToro
• Edward Woodford, CEO of SeedCX

The discussion led to some interesting predictions about how exchanges are going to transform the financial ecosystem.  Below are some key excerpts from the panel:  

1. The problems with regulations in the exchange space 
2. Solutions to prevent wash trading 
3. How can exchanges improve the industry’s reputation?
4. How are cryptocurrencies going to become normalized? 
5. How can exchanges collaborate with banks, and what are the benefits?
6. Is blockchain eventually going to “kill” banks? 

1. The problems with regulations in the exchange space 

The panelists agree that there is room for improvement regarding regulating the exchange space, because of problems such as wash trading, incorrect rankings, and too much variation between countries.  There is a need for a standard regulation system across countries and new third party regulators that are experts in crypto technology.

2. Solutions to prevent wash trading 

Wash trading gives newcomers a false idea about what which exchanges to join, causing many of them to lose money.  Across the board, the panelists saw a need for more regulations to prevent wash trading, particularly on ranking sites such as CoinMarketCap.  Other solutions could be chain analysis, an increase in third party regulators, or an increase in punishment for wash traders.  

3. How can exchanges improve the industry’s reputation? 

Cryptocurrencies are still relatively new compared to financial institutions that have been around for over 700 years, therefore we have yet to see how drastically it will change the financial space.  The experts are optimistic that blockchain will revolutionize the financial ecosystem, even if there is some uncertainty about how or when.  

4. How are cryptocurrencies going to become normalized? 

Companies are finding innovative ways of using blockchain, whether it be to instantly feed a child in Uganda via the Blockchain Charity Foundation like Binance, or transforming into a fintech giant to completely change the financial service landscape.  There is an opportunity to use blockchain in creative ways to show new consumers that it can become a part of everyday life.  

5. How can exchanges collaborate with banks, and what are the benefits?

Banks are becoming more willing to incorporate blockchain solutions into their business models, although the integration has been quite slow.  Companies like eToro and SeedCX have successfully collaborated with banks, and their panel representatives explain why it is important.  

6. Is blockchain eventually going to “kill” banks? 

Yoni Assia asserts that blockchain is the “bank industry killer,” and that banks will disappear in the coming decades.  Is he right?

This was only a sample of the takeaways from the “Role of Exchanges in the Democratization of Digital Assets” panel.  The full transcript of the panel is available below for more insights.