Financial exchanges are still divided when it comes to cryptocurrencies

LONDON (Reuters) – Regulated financial exchanges are discussing how to capitalize on interest in cryptocurrencies, an industry group said on Tuesday, but a third of respondents to its latest survey said they had no plans to offer the asset class.

A report by the London-based World Federation of Exchanges (WFE) said exchanges were concerned about the lack of consistent regulatory standards, market volatility and the potential for cybersecurity risks associated with crypto assets.

Of the 29 exchanges that responded to a survey by WFE — whose members include U.S.-based Nasdaq, Deutsche Boerse in Germany and Switzerland’s SIX Group — 12 offer crypto-related products or services, while 17 do not, it said it without naming the respondents.

The group said that of those who currently have no crypto-related offerings, only seven had plans to launch them in the future, while ten did not.

Cryptocurrency prices plummeted in 2022 after a series of collapses at leading crypto firms, including FTX, caused investors big losses, prompting lawmakers to ramp up calls for regulation.

About 38% of exchanges surveyed by WFE have established or plan to establish working groups focused on crypto-related assets or services.

Just over a quarter of respondents said they expect crypto assets to become mainstream in the near future, according to the WFE.

“Crypto is a priority for all of our members and we are in constant dialogue with them on how we can capitalize on the new opportunities in this space,” said WFE CEO Nandini Sukumar.

Mainstream financial institutions have long expressed interest in the possibility of using blockchain – the technology behind cryptocurrencies – in the issuance and trading of traditional financial assets. However, the technology has yet to be deployed on a large scale.

On Monday, the London Stock Exchange Group said it was looking into using blockchain to build a system “to raise and move capital across asset classes,” but that would not involve building crypto assets.

(Reporting by Elizabeth Howcroft; Editing by Tom Wilson and Jan Harvey)

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