The very concept of cryptocurrencies is inadvertently tied with self-regulation. Bitcoin (BTC), heralded by many as the flagship cryptocurrency, as well as its underlying blockchain tech that is finding more and more applications across a wide range of industries, is by definition in favour of decentralisation of regulation. It should come as no surprise then that four crypto exchanges have joined forces to establish an association that will promote their self-regulation – but it is still big news.
US Exchanges Team up in Favor of Self-Regulation
The four crypto coin exchanges are amongst the most well-known US exchanges, with significant experience in crypto trading. Gemini, bitFlyer USA, Bitstamp and Bittrex have announced that they will be the first members of the “Virtual Commodity Association Working Group” – and it remains to be seen whether other exchanges will join in the process. For now, major exchanges like Coinbase and Kraken do not seem to be on board – although it is unclear why they were not involved and whether they aim to do so in the future.
The news is still fresh, but undoubtedly if the project goes as planned this could have an impact on crypto and especially BTC prices, influencing the 1 BTC to USD exchange rate. News of the industry self-regulating sends a strong signal to potential investors that it intends to increase stability – which could ultimately have a positive effect for digital currencies like BTC. BTC is particular has been under criticism for its volatility and that has made some investors sceptical. Securing a more stable price could boost the 1 BTC to USD rate.
Initiative Spearheaded by Gemini
Of course, it all depends on how the situation will unfold in reality and whether the new partnership will be able to meet its objectives. The new working group is set to pave the way for the creation of an organisation dedicated to the self-regulation of digital commodities like BTC. Among the activities of the new working group will be networking with large-scale investors looking to invest in the crypto trading market. If they are successful in this endeavour, this could mean the rise of the BTC to USD rate, as investors could start feeling more comfortable with the digital coin market. They will also work towards developing industry standards and identifying guidelines.
Gemini, the exchange founded in 2014 by the Winklevoss brothers, is spearheading the group. This might have something to do with the fact that the Winklevoss twins successfully registered a patent over the summer regarding a system focusing on digital assets held by exchange-traded products. A few months ago, they also announced that they had teamed up with Nasdaq with the aim of market monitoring and responding to market manipulation. Could teaming up with a major US stock exchange with significant experience dealing in USD result in the exchange of know-how with regard to how the US dollar could respond to the rising crypto market – and especially BTC? If so, the newly founded initiative could profit from these underlying connections to make sure the industry standards it drafts promote the stability of the BTC to USD exchange rate.