You see it everywhere in the crypto space now — exchanges jostling for position to attract institutional money, the expansion of trading features (i.e., derivatives and margin trading) for users, and initiatives to deepen liquidity pools through incentive structures for market makers and partnerships with high profile liquidity providers.
However, there remains a noticeable drawback to many endeavors by exchanges to attract the broadest set of users — regulation.
Fragmented regulatory perspectives in different regions of the world have hindered much of the standardization and features of cryptocurrency exchanges. In the US, derivatives products are only beginning to gain regulatory favor, margin trading is sparse, and features lag behind offshore exchanges — particularly in Asia.
For CoinZoom, an institutional-grade crypto exchange from the team behind Interbank FX, the market is ripe for disruption. Their plan? Fuse a unique blend of regulatory approval and comprehensive features to capture vast portions of crypto users, and eventually, the mainstream.
A Unique Regulatory Status
Regulation has been one of the foremost topics in crypto since Bitcoin came onto the scene in 2009. That sentiment has only accelerated in recent months as discussions around ETFs, derivatives, options, and central-banked issued digital currencies gain momentum.
Exchanges, like Bitfinex, have historically had to play regulatory arbitrage throughout various countries to maintain stable banking relationships and avoid the long-reaching ire of US regulators. For Bitfinex, that has been an arduous path, and for others, it has inhibited their ability to expand their product offerings to users out of fear of administrative retribution.
For CoinZoom, the renowned experience of its founders in the global FX markets, which experience over $5 trillion in volume per day, has enabled the exchange to enter the crypto markets with a robust global regulatory standing — replete with liquidity and institutional partners. CoinZoom is both a regulated Money Transmitter and Money Service Business in the US, and it’s affiliated entity, CoinZoom Securities is overseen by the SEC and FINRA.
Additionally, the exchange is a regulated digital currency exchange in Australia and recently tacked on EU registration in Ireland to its regulatory resume — called CoinZoom Europe, Limited.
Quite simply, most cryptocurrency exchanges do not have such sparkling regulatory statuses in a single country, let alone multiple. This has profound consequences on CoinZoom’s ability to build numerous fiat-crypto gateways and railways, including global funding options like Visa, Mastercard, ACH, Wires, and other funding options. Coupled with a Visa-backed debit card and rewards program connected directly to user exchange accounts, and the regulatory status of CoinZoom is already paying dividends.
The bonus lies in the additional features that CoinZoom has accumulated in step with its regulatory status, features that many users and institutions have been yearning for under a single roof.
The Appeal of Advanced Features & Financial Products
One of the prevailing narratives in crypto throughout 2019 has been the rollout of margin trading and derivatives products among spot exchanges and standalone derivatives platforms. BitMEX’s dominance and lucrative revenue (including its insurance fund) sparked widespread interest in building native derivatives products within existing exchanges.
For example, Binance unveiled margin trading on its primary exchange and Bitfinex opened up a perpetual swap analog for BTC and ETH. And BitMEX continues to push forward with other offerings, like fixed income products that expand its feature set.
However, BitMEX exists in a precarious regulatory position and is currently under investigation by the CFTC for serving US customers.
Once again, CoinZoom’s regulatory status is an immediate boon for the firm’s business model to extend multiple, advanced financial products to its users. For instance, CoinZoom is a highly liquid fiat-crypto gateway with multiple funding pathways, underscored by a suite of institutional liquidity partners deriving from the team’s experience at Interbank FX.
Add in leveraged trading of select, liquid cryptocurrencies (no Poloniex socialized CLAM losses), a suite of native stablecoins, and fixed income products (i.e., interest rate returns) for Staking leading cryptocurrencies, and you can begin to see the type of scope for additional features that good regulatory standing affords. For context, Coinbase just announced fixed interest rate returns for its native stablecoin USDC, something CoinZoom is bootstrapping with.
In a digital era where convenience and features often capture the most extensive user set, CoinZoom’s fusing of a resolute regulatory standing and comprehensive feature suite presents formidable competition to a crowded field of exchanges. Regulation has traditionally proved a significant drawback for many crypto exchanges, but CoinZoom is wielding it to their advantage.
Disclaimer: Blockmanity is a news portal and does not provide any financial advice. Blockmanity’s role is to inform the cryptocurrency and blockchain community about what’s going on in this space. Please do your own due diligence before making any investment. Blockmanity won’t be responsible for any loss of funds.
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