Dear Steemers,
If we ask the founders and developers of Blockchain.io project what the future of cryptocurrency exchanges in Europe will look like, their answers are very interesting and they make sure you pay attention to their innovative approach in how to operate a cryptocurrency exchange. In this article, using my public policy and lobbying background, I highlight the importance of compliance for cryptocurrency exchanges such as the upcoming Blockchain.io.
Blockchain.io is a new cryptocurrency exchange in development, described by project leaders as Your Gateway to the Internet of Value. This new European project, which promises to provide trust for individual and institutional traders and investors, is backed by a strong team from Paymium, a safe bitcoin exchange existing from 2011 (Source). If we dig a bit deeper into the project, we can see the security that Blockchain.io is promising is top class, with different options for a cold storage as well as a cryptographic proof of reserve. The atomic swaps recently introduced are something Blockchain.io can be proud of as well.
However, these features are not enough if the policy aspects are not taken into account. There are a lot of policy areas which crypto exchanges fall under: tax compliance, financial stability, market integrity and maybe one of the most important ones - customer & investor protection. There are over 200 crypto exchanges out there - largely unregulated, with nearly 20 Billion dollars in daily volume and over 10's of Millions in members (Source). If we consider many more of them will be set up in the years to come, we have to be aware that the cryptocurrency environment might be "polluted", so to say, and go from being trustful to distrustful.
We know by know, that the crypto boom is leading to a surge in business for compliance companies that help businesses verify customer identities and make sure their funds are legitimate (Source). So, the rule is to know your customer (KYC) and this is one big part of compliance.
This is also one of the examples which is helping to assure the policymakers that blockchain technology is here to stay and even improve other sectors as it grows and evolves. Blockchain.io is a great representation of that motivation and decisiveness, because of their continuous efforts of putting compliance principles out there with a characteristically positive tone. They are ensuring customer & investor protection because they know that public confidence is build primarily on those!
What inspires crypto enthusiasts such as myself is the Blockchain.io's approach, which ensures the integrity of the platform by guaranteeing external audit is done, compliance with all current and future EU regulations and customer balances matching the inventory of coins held by the exchange (Source). Numerous exchanges out there do not have the big picture that the public needs to feel safe in terms of security of their digital assets and in terms of not operating against the law. Blockchain.io started with seeing the big picture and it is just refining the details.
An infographic from their pitchdesk (Source) is showing just that:
This also proves that it truly is time for a full-scale European exchange dedicated to compliance, transparency and reliability to lead the way towards the hearts and minds of the European public. This is where the recognition of crypto exchanges and of course crypto currencies will flourish. In July 2018, the European Parliaments' Policy Department for Economic, Scientific and Quality of Life Policies conducted an in-depth analysis titled Virtual currencies and central banks monetary policy: challenges ahead, where it is stated that: "Policymakers and regulators should not ignore VCs, nor should they attempt to ban them. Both extreme approaches are incorrect. VCs should be treated by regulators as any other financial instrument, proportionally to their market importance, complexity, and associated risks. Given their global, trans-border character, it is recommended to harmonise such regulations across jurisdictions." (Source).
A strong statement such as this one, coming from a public in-depth analysis should not be ignored. As Paymium and Blockchain.io CEO Pierre Noizat says: Europe has nothing to fear from new technologies: by embracing them in an intelligent way, it could create a privileged dreamland for investors (Source). The CEO's transparency is backed by Paymium's already proven worth. Other exchanges should look up to Blockchain.io's momentum and help in the transition towards full compliance of crypto exchanges.
There is one more way how Blockchain.io and its parent company Paymium.com are merging the best of both worlds - they are developing a centralised exchange with a decentralized settlement. I will write more about the importance of this approach in my next article.
To find more about Blockchain.io follow this link.