Before Operating a Cryptocurrency Exchange, Nasdaq Needs Clear Regulations

The Nasdaq stock exchange is considering launching a cryptocurrency exchange. But it won’t do so until there are clear regulations in place. It explains the exchange is “continuing to investigate the idea of a crypto exchange,.” But there’s a lot of work to do before it becomes a reality. It’s important that the right regulatory regimes for cryptocurrencies. And what kind of self-regulatory regime or oversight regime makes sense,” According to Friedman. “So we’re having that discussion.” Friedman’s remarks come at a time when the SEC is tightening down on initial coin offerings (ICOs). Which have raised billions of dollars over the past few years. In November, the SEC charged two ICOs with fraud, and last week it shut down an ICO that had raised $21 million. If you are a new investor in cryptos, you can use profit maximizer to invest.

What Is A Cryptocurrency Exchange?

A cryptocurrency exchange is a digital marketplace. Where traders can buy and sell cryptocurrencies. By using different fiat currencies or altcoins. A crypto exchange can be of any type. Centralized exchange, a decentralized exchange, or a hybrid exchange. To trade cryptocurrency pairings, cryptocurrency exchanges are frequently employed.

Centralized exchanges are run by a single company that manages all the trades. Also, the transactions that take place on the platform. Decentralized exchanges are distributed among a network of computers. With each computer managing a part of the trades and transactions. Hybrid exchanges offer features of both centralized and decentralized exchanges.

Cryptocurrency exchanges charge fees for each transaction that takes place on their platform. Some exchanges also offer discounts to traders. To those who hold certain amounts of cryptocurrency on their platform. Or who make trades using certain types of orders.

Why Nasdaq Can’t Launch Crypto Exchange Until Regulations are Clear?

Nasdaq has been rumored. The exchange is interested in launching a cryptocurrency exchange. Yet, Nasdaq can’t launch a crypto exchange until regulations are clear.

The problem is that cryptocurrencies are currently unregulated in most jurisdictions. This means that there is no clear legal framework. For how Nasdaq would operate a cryptocurrency exchange. Until there is more clarity from regulators on how to regulate cryptocurrencies. Nasdaq will not be able to launch its own exchange.

This isn’t to say that Nasdaq doesn’t believe in the potential of cryptocurrencies. In fact, the exchange has already been working. With blockchain startups. And has even invested in a few blockchain projects. Yet, without regulatory clarity. Nasdaq cannot risk launching its own crypto exchange. And getting into hot water with regulators down the line.

In the meantime, Nasdaq is likely to continue working with cryptocurrencies. Behind the scenes and investing in blockchain projects. Once regulations catch up to the rapidly-evolving world of cryptocurrencies. Nasdaq will be ready to launch its own exchange.

Conclusion

The Nasdaq needs to put in place clear regulations before it launches a cryptocurrency exchange. Because there are just too many unsolved questions at the moment. On about how such an exchange would work. Without clear regulations. it is difficult to know how the Nasdaq would protect investors from fraud or price manipulation. Besides, without clear regulations. It is also difficult to know. How the Nasdaq would ensure that its crypto exchange meets all the necessary compliance requirements. Until these questions are answered. It is best for the Nasdaq to avoid launching a crypto exchange.

The Nasdaq CEO Adena Friedman said in an interview with CNBC that the exchange is “continuing to investigate the idea of a crypto exchange.” But there’s a lot of work to be done before it becomes a reality. Friedman’s comments come as the SEC has been cracking down on initial coin offerings (ICOs). Which have raised billions of dollars over the past few years. In November, the SEC charged two ICOs with fraud, and last week it shut down an ICO that had raised $21 million.

Without clear regulations from the Securities and Exchange Commission (SEC). It is difficult for Nasdaq to assess the risks involved in launching a cryptocurrency exchange. As such, Nasdaq will not launch its own exchange. Until there is more clarity from regulators on how to properly regulate cryptocurrencies. In the meantime, Nasdaq is likely to continue working with cryptocurrencies. Behind the scenes and investing in blockchain projects. Once regulations catch up to the rapidly-evolving world of cryptocurrencies. Nasdaq will be ready to launch its own exchange.