A lack of regulation and transparency in the digital asset sphere has been cited as deterrent for institutional adoption of crypto, but this reticence is now receding with the emergence of trusted next-generation exchanges that place market integrity at their core.
Since 2011, there have been dozens of exchange hackings, resulting in the equivalent of billions of US dollars worth of stolen assets. In May 2019, Binance, one of the world’s largest crypto exchanges was notoriously hacked, resulting in a loss of 7,000 Bitcoin, worth in the region of $40 million at the time. It was a shocking development and served as a stark reminder to both current and prospective investors that even the industry’s largest players are not impervious to masterfully orchestrated attacks.
At the dawn of digital asset trading, there were few regulatory systems in place to control the type of traffic exchanges received. Because of hacks, ill-usage, and extensive anonymity, these early experiences contributed to a somewhat shady reputation the crypto world is still battling. As the industry has matured, industry players have developed infrastructure and protocols to reduce the prevalence and ease of criminal activity from occurring. In the recent years, more and more exchanges are investing more in the resources to support Know-Your-Customer (KYC) and Anti-Money Laundering (AML) policies and procedures.
As governance on digital asset markets reaches equivalence with conventional finance, the banking sector is increasing its involvement in the space.
USD Coin, known as USDC, is a US dollar-backed stablecoin created by Circle and Coinbase (the Centre Consortium) in 2018. It quickly became appealing as it is the only fully and publicly audited stablecoin currently available. Built on Ethereum, USDC is backed by industry giants such as Goldman Sachs and Silvergate. Unlike other stablecoins, USDC is verifiably fully collateralized. This means that for every USDC released, there is a US dollar deposited into a Centre Consortium bank account, which is heavily monitored and audited every month by Grant Thornton LLP as part of their emphasis on transparency.
Stablecoins are displaying astronomical growth, with a new study showing that on-chain activity for these digital assets has increased 800% in the last 12 months. The most liquid are now the most used: ERC20 tokens have pushed Ethereum blockchain daily transactions to their highest since the frothy market days of July 2019. Now — what is a stablecoin and why are we seeing such rapid growth?
One of the most important values that underpins the EQONEX exchange is demonstrating adherence to robust regulatory standards. We have set our sights on becoming the bridge between traditional finance and the existing virtual asset community, and as such we felt it was crucial to align our business to a jurisdiction that had both innovative and trustworthy legislation for virtual currency trading.
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EQONEX is a digital assets financial services company focused on delivering a full, digital asset ecosystem that offers innovative, trusted, and transparent products and services.
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