Four Crypto Currency Exchanges Form Working Group to Create New Standards
Four exchanges focused on digital currencies have decided to create a working group meant to establish fresh industry standards. This included Winklevoss twins’ controlled Gemini apart from Bittrex, BitFlyer USA, and Bitstamp. The group has formed Virtual Commodity Association Working Group (VCAWG). The focus of this group is nothing but self-regulation of the virtual currency markets. The move assumed significance since there is continued ambiguity in the digital coin sector due to regulators’ inability to come up with complete regulations.
Improve Industry Standards
Currently, the cryptocurrency industry is only in the nascent stage, and the market is largely unregulated around the world though there are some activities here and there. The digital currency sector is keen to have its own organization much like the securities exchange in equities have so that it could have common standards apart from responding to declarations by regulators from time to time, bitcoinist.com reported. With the establishment of a new group, there is hope that it would work in a similar fashion.
As a result, the group believes that this could attract institutional investors to get involved in the cryptocurrency market. Talking to the media, CoinRoutes founder, Dave Weisberger, viewed the latest development as a good sign of multiple competing exchanges coming together to form a group. He expressed his confidence that this would enhance the overall standard of the industry apart from their mutual self-interest. Similarly, Trading Technologies’ Patrick Rooney thinks that the group could bring together industry and the regulator bridging the communication gap.
Rooney believes that the working group will offer a common voice and that it would only benefit their communications with the regulators apart from the trading community. At the same time, this is not the first working group in the cryptocurrency industry. For instance, 16 registered digital coin exchanges in Japan have joined in April to unveil the Japan Cryptocurrency Exchange Association (JCEA). The association’s objective is to self-regulate the virtual currency exchange platforms.
The Japanese Association has taken one of the serious steps in reducing the high volatility and the risks associated with it in the crypto sector. This was quite evident when the JCEA planned a margin capped trading rules. As far as the VCAWG is concerned, the biggest challenge is tackling the existing environment of ambiguity. Similarly, there existed different prices for different crypto coins on various exchanges.
No Common Host
Currently, there is nothing like a common host that could audit every market data in the cryptocurrency sector. However, Weisberger thinks that the newly established organization will attempt to address the issue and resolve it. The industry is compelled to take some concrete measures to stimulate strong confidence among the investing public in the virtual assets.
He said, “Institutions are genuinely skeptical today over the fairness and data quality in the crypto market. […] At CoinRoutes, even though we help our clients consolidate the data, there is a lot of concern over the quality of the exchange data we aggregate as well as underlying manipulation. An industry SRO is a great start towards ameliorating those concerns.”