The World Federation of Exchanges (WFE), a London-based industry group, released a report on Tuesday revealing a significant divide among major financial exchanges on the adoption of cryptocurrency-related products and services. The report comes at a time when the cryptocurrency market is grappling with regulatory challenges and market volatility.
The WFE surveyed 29 regulated financial exchanges, including prominent members such as the U.S.-based Nasdaq, Germany’s Deutsche Boerse, and Switzerland’s SIX Group.
The survey found that 12 of the 29 exchanges currently offer cryptocurrency-related products or services. However, 17 exchanges have opted not to venture into the cryptocurrency space.
Among those without current crypto-related offerings, only seven have plans to introduce such products in the future. The remaining 10 have no plans to offer cryptocurrency services, citing concerns over the lack of uniform regulatory standards, market volatility, and potential cybersecurity risks associated with crypto assets.
The regulatory landscape for cryptocurrencies remains fragmented and uncertain. Nasdaq, for instance, recently paused its plans to launch a crypto custody business. The company cited the shifting regulatory environment in the U.S. as the primary reason for halting its digital assets custodian business. Nasdaq’s CEO, Adena Friedman, stated that the company would continue to build technology capabilities to position itself as a leading digital asset software solutions provider.
Similarly, reported that Nasdaq aborted its launch of a custodian business in the U.S. due to the shifting business and regulatory environment. The exchange operator is also halting its efforts to pursue a license related to the business but will continue to build out its technology to handle crypto for clients.
Market volatility is another significant concern for exchanges. Cryptocurrency prices experienced a sharp decline in 2022 following a series of collapses at top crypto firms, including FTX, which left investors with substantial losses. This volatility has led to increased calls for regulation from lawmakers.
Cybersecurity risks related to crypto assets also remain a significant concern. The lack of a secure and regulated environment for storing cryptocurrencies has been a stumbling block for many exchanges.
