Digital Assets Exchange (DAeX) is a platform where people trade assets in digital forms, or digital forms of representation of real world assets. Currently, majority of digital assets traded over the virtual world are in the form of tokens (be it assets backed or not) or cryptocurrencies. Think of it as something similar to conventional stock or forex market, only this time, it serves the digital assets developed mainly via Blockchain or DLT based solutions.

Nation-state backed / regulation compliant DAeX (Digital Assets Exchange) – the ship is sailing.

Another industry progress log to Blockchain Insider’s article: Two Monetary Worlds & Three Phases of Cryptocurrencies

As the regulators steps in, we start seeing the formation of institutional or corporate backed cryptocurrencies in the making. The center of the universe will be the exchanges, where transactions happen and interoperability is in progress.

Related industry progress as reported by Cointelegraph between 24th and 28th March 2019

Study: 14% of Major Crypto Exchanges Are Licensed by Regulators

In the study, Coinfirm evaluated the exchanges into seven categories of risk, including license and authorization, Customer Due Diligence (CDD) and Know Your Customer (KYC) compliance, Anti-Money Laundering (AML) compliance, sanctions, senior public figures, jurisdiction, and negative and adverse media.

Japan Green Lights 2nd Crypto Exchange for April Launch as Data Shows Huge Interest

“With the concept of ‘connecting and exchanging all values and making transactions simple,’ DeCurret aims to become ‘a major financial servicer for digital currency’ that sets standard [sic] for secured and convenient digital currency transaction,” DeCurret summarized in the press release.

Tagomi Holdings’ Subsidiary Gets BitLicense from New York DFS

The firm’s parent company, Tagomi Holdings, was launched by PayPal co-founder Peter Thiel’s venture capital firm in December 2018. The company represents an electronic brokerage for digital assets offering cross market execution, capital management, post-trading reporting, as well as settlement and custodial services.

With that, Tagomi Trading is an institutional-grade aggregation platform for trading virtual currency assets and executes trades across multiple liquidity venues, the DFS’ statement explains.

New Partnership Purports to Create First Approved Crypto Exchange in Vietnam

The collaboration is designed to facilitate the production of digital currency and the creation of a cryptocurrency exchange in Vietnam, to which the companies have supposedly received an appropriate license. The establishment of an authorized cryptocurrency exchange could be a large step for the industry in Vietnam, as the government has previously taken a hard line against digital assets.

E-Commerce Firm Rakuten Readies Cryptocurrency Exchange for April Launch After Name Change

Rakuten, which follows several major Japanese tech players in entering the crypto exchange market, renamed its product from Everybody’s Bitcoin earlier this month. The company had acquired the exchange under the former name in August last year for 265 million yen (at the time $2.4 million).

Japan: Yahoo!-Backed Cryptocurrency Exchange Set for May Launch

Japanese cryptocurrency exchange Taotao (formerly BitARG) will start trading a limited range of cryptocurrencies in May. The plans originally came to light in March 2018, when Yahoo! Japan announced it would acquire a major stake in the exchange through its subsidiary, YJFX. At the time, sources suggested the purchase had cost the company around 2 billion yen (then $19 million).

US Institutional Crypto Exchange Seed CX Expands to Asia With New Partnership

United States-based institutional cryptocurrency exchange Seed CX has partnered with Singapore-based fintech company Hydra X to offer its trading service in Asia. Seed CX is a licensed digital asset exchange for both spot market and U.S. Commodities and Futures Trading Commission (CFTC)-regulated derivatives. As Cointelegraph reported at the time, Seed CX closed a $15 million funding round led by alternative investment firm Bain Capital in September last year.

LocalBitcoins Announces Supervision by Financial Supervisory Authority of Finland

International peer-to-peer (P2P) crypto exchange LocalBitcoins will soon become supervised by the Financial Supervisory Authority of Finland. On March 18, LocalBitcoins launched a new account registration process, and is now working on a more efficient and safe identity verification process. The company noted that corporate accounts will undergo a separate verification process. Along with the regulatory announcement, LocalBitcoins also stated that it is developing tools to increase compliance with regulators.

Featured Image by Gerd Altmann from Pixabay

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The key is programmable money.

What we have now is truly border-less, programmable money backed by immutable computer systems based on pure logic & mathematics.

Effective resource allocation and distribution can be achieved through cognitive AI system and business process automation.

Two Monetary World and The Exchanges

There are 2 types of exchanges related to the crypto world at the time of writing:

• Fiat Exchanges (USD), and
• Crypto-to-Crypto Exchanges

Fiat Exchanges convert your fiat currency to crypto, that means depositing USD (or your country’s currency) with an exchange in order to get BTC (Bitcoin) or ETH (Ether). Some of the famous exchanges under this category are Coinbase, CoinMama, Kraken,
CEX.io, LocalBitcoins, BitStamp, Gemini, BitFlyer etc.

Crypto-to-Crypto Exchanges are those exchanges with more options, they carry more niche currencies. Some examples are Binance, Bittrex, Cryptopia, KuCoin, Poloniex etc.

As a matter of cautious, if you’re new to crypto investing, be sure to read up on best practices for keeping your crypto secure like using two-factor authentication and moving your coins to a private wallet once you’ve purchased them.

You can get further information about the exchanges from Coin Central’s article Top Cryptocurrency Exchanges in 2018.

At the time of writing, we have yet to see any conventional or mainstream exchanges moving into the crypto space, though there had been news and rumors about Nasdaq or Switzerland’s largest stock exchange wants to offer cryptocurrencies.

Nation-State Backed Crypto Exchanges?

Do we need a nation-state level crypto exchange? Does it make sense to have one? Why would we need that in the first place?

Before we figure out what are the purposes of having a nation-state level crypto exchange, we should take a look at what can a nation-state crypto exchange do. Two of the main functions of a nation-state crypto exchange are nonetheless:

1) Create and mobilize capital in crypto form, and

2) Moving capital in between crypto and fiat systems, where the bottom line is stability

Combine the monetary part of the Blockchain (the cryptocurrency) and the technology part of it, it’s not hard to figure out that the benefits of having a nation-state level crypto exchange would be:

1) To provide real-time, transparent view of capital flows

2) An immutable ledger of capital trail for the authorities

3) Jobs creation and ripple effects to the country through the implementation of crypto economy, and

4) Effective and automated tax collection through programmable money (the cryptocurrencies)

Programmable money is the future

But, where is the money?

For instance, the creation of another entity that could be as big, or even bigger than conventional stock exchanges in some countries, such as the Bursa (counter 1818) of Malaysia, which take cares of matters related to global scale crypto and tokenized businesses listed on board.

The challenge is, how do we distribute ‘the cake’?

Excerpt from Chapter 3 of the book Blockchain Insider, Smart Money.

Notes:

At the time of writing, around 16th of August 2018, Binance LCX just launched its Fiat-to-Crypto Exchange in Liechtenstein, and Thai SEC just cleared seven cryptocurrency operators to serve clients while reviewing two more – as reported by CoinTelegraph.

News links:

https://www.businesswire.com/news/home/20180816005660/en/Binance-LCX-Announces-Fiat-to-Crypto-Exchange-Crypto-Investors

https://www.sec.or.th/th/Pages/News/Detail_News.aspx?tg=NEWS&lg=th&news_no=89&news_yy=2561

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