Morgan Stanley rates countries based on cryptocurrency trading volumes

Morgan Stanley, the U.S. based Financial Services Company has gained great recognition in its research based on Investment Business. They have been advising governments and various institutions about managing trade, distributing capital and many other business-related concepts for the development of these firms.

Morgan Stanley on 29th April 2018, released a research conducted on the online cryptocurrency market. The research was done to measure the trading volumes of cryptocurrency in various parts of the world on legal exchanges and the number of legal exchanges across the world.

Sheena Shah, an analyst at Morgan Stanley and her team sent a note to clients this week examining cryptocurrency exchanges around the world. Exchanges are a platform on which cryptocurrencies trade and the biggest exchanges can see daily trading volumes in billions.

The research shows that the majority of trading volume flows through exchanges registered in Malta, followed by Belize. The United Kingdom has the highest number of legally registered exchanges but accounts for just 1% of trading volumes.

This is largely because of Binance, one of the biggest exchanges in the world, which recently announced plans to shift its legal headquarters to the small European island, Malta.

Shah says:

“The largest exchange called Binance announced intentions to set up headquarters there, so if we take that company out, Malta would be much further down the list.”

Binance, which is currently registered in Hong Kong, announced earlier that it was moving away from Asia due to more stringent regulation, especially from Japan. The third-largest exchange, OKEx, also recently announced that it would be opening an office in Malta as the government markets itself as ‘Blockchain Island’.

Even though Malta holds command when it comes to volume, the United Kingdom is actually the location of the largest number of exchanges although the country accounts for just 1% of global trading volumes.

According to the Shah and her team, most of the legal exchanges are in the UK, Hong Kong, and the US. The three countries have relatively large financial centers and the US has a technology focus in Silicon Valley.

Shah adds:

“There are six exchanges located in India but many are likely to have to shut down or relocate as this month the central bank ordered commercial banks to close accounts with exchanges.”

Cryptocurrency exchanges are highly being scrutinized by regulators worldwide as more and more money has flowed into the sector over the last year. While some countries such as India and the US have sought to crack down on the activity, countries and territories such as Switzerland, Gibraltar and Malta have sought to attract the nascent industry to their shores.

Shah and team added to their research:

“Governments are having to consider their regulatory stance quickly, as the swiftly advancing cryptocurreny and blockchain industry can have vast economic benefits for a particular country through the creation of start-ups, research and development and financial transactions.”

The report concludes with the reason behind the current flow of transactions stating that:

“Defined but also attractive regulation makes an exchange decide to choose one country over another, a series of rules, regulations, and laws for companies to abide by when dealing with digital tokens, customer assets, AML policies, taxes, etc. Regulatory certainty is part of the attractiveness for the companies so they can plan for the future as they know what to expect. Low taxes are a benefit.”

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