Well-Structured Regulatory Frameworks Result in High Crypto Trading Volumes: Morgan Stanley Reports

Malta has the largest share of crypto trading volumes, while United Kingdom have the highest number of crypto exchanges.

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The Republic of Malta now holds the largest share of crypto trading volumes out of all the countries around the globe. On 29th April 2018, Business Insider publicized the information through a report with respect to a research carried out by the Morgan Stanley Bank.

The researches of Morgan Stanley, led by research analyst Sheena Shah, conducted a research on the distribution of digital currency volumes and digital currency exchanges for all countries.

According to the report, the five countries containing highest crypto trading volumes are Malta, Belize, Seychelles, United States and South Korea respectively. The research report also showed the five countries containing highest number of exchanges are United Kingdom, Hong Kong, United States, Singapore and Turkey respectively.

Deviation of Malta and Belize Crypto Trading Volumes

However, the research showed deviation in the data retrieved from the leading countries Malta and Belize, as they only ranked 22nd and 24th respectively when it came to number of registered companies in the country. However, the deviation can be understood given Binance and OKEx, the largest exchanges in cryptocurrency trading volumes are hosted in Malta and Belize respectively. Shah mentioned the following;

The largest exchange called Binance announced intentions to set up headquarters there [Malta], so if we take that company out, Malta would be much further down the list.

Another discovery from the statistics was that the United Kingdom only contributes one percent to the global crypto trading volume. This is interesting as the United Kingdom hosts the highest number of crypto exchanges.

Local crypto business regulations

According to Shah, crypto exchanges specially considers the local crypto business regulations when choosing a country to register in. She added that for a specific regulatory framework to have attraction it does not necessarily have to be lenient but rather well-structured, meaning the exchanges “know what to expect” and can “plan for the future”.

Defined but also attractive regulation makes an exchange decide to choose one country over another – a set of laws for companies to follow when handling digital tokens, customer assets, AML policies, taxes, etc. Regulatory certainty is part of the attractiveness for the companies so they can plan for the future as they know what to expect. Low taxes are a benefit.

This assumption tallies with the decision by Maltese government to adopt a favorable policy towards digital currency businesses. The research by Morgan Stanley Bank has given enough evidence on the advantages gained by the active development of a well-structured legal framework in Malta.

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