Morgan Stanley research has found that the majority of cryptocurrency trading volume flows through the nation of Malta. The study showed that while the United Kingdom has the largest number of legally registered cryptocurrency exchanges, it accounts for a mere 1% of trading volumes. Exchanges are the platforms on which cryptocurrencies trade, and the largest can see daily trading volumes in the billions.
The international investment bank’s research mapped out the locations and trading volumes of cryptocurrency exchanges, categorised by country. Despite Malta having only the 24th biggest population of cryptocurrency exchanges, it dominated the rankings in terms of trading volume. This can largely be attributed to Binance, one of the largest exchanges in the world, recently announcing its plans to move its headquarters to Malta.
“Binance said that it was moving away from Asia (currently registered in Hong Kong) due to more stringent regulation, especially from Japan. The third-largest exchange, OKEx, also recently announced that it was opening an office in Malta as the government markets itself as “Blockchain Island.”
Morgan Stanley Note
Morgan Stanley’s report concluded that cryptocurrency exchanges are attracted by regulation which allows them legitimacy but is also not too harsh, something that is lacking in most of the world.
“Defined but also attractive regulation makes an exchange decide to choose one country over another – a set of laws for companies to follow when handling 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.”
Sheena Shah, Morgan Stanley research team