It is all too easy to become complacent in a world which has driven so much interest and enthusiasm toward cryptocurrencies in general, therefore providing a ripe environment for cryptocurrency exchanges and facilities which operate in conjunction with cryptocurrency to flourish without limit.
Those who have been affected by the outlawing of Cayman Islands-operated, Chinese-led cryptocurrency exchange Binance by British authorities last week will have been left high and dry without a place to conduct their cryptocurrency trading, therefore now needing to look for another company, and begin their journey of establishment of trust, learning how a new exchange operates and having to accept different priorities and trading environment, and will likely be concerned that the Financial Conduct Authority (FCA) could easily come down hard on any firm that operates without a license in the United Kingdom.
Changpeng Zhao, who founded Binance, has been in this situation before, when he moved Binance’s headquarters out of China due to China’s increasing regulation of cryptocurrency.
There is now a clear direction which has been maintained over the past two to three years, and is continuing toward the immediate future in terms of how the entire financial services structure worldwide will evolve, and it certainly is even more clear that digital assets and decentralized finance will be a staple component, meaning that fully comprehensive exchanges and facilities will be needed.
Whilst it was inevitable that things would go in that direction, only a small number of companies actually established their business with a detailed plan in order that they would be able to continue to build further cryptocurrency related services as the market evolves and becomes more sophisticated and mature, and as regulation becomes necessary due to cryptocurrency being accepted, however reluctantly, by the authorities as not only a mainstream feature in finance, but an extremely popular financial ecosystem which is now a payment method, investment medium and tradeable asset, not to mention smart contract software suite among hundreds of millions of people and businesses worldwide.
Currently, cryptocurrency trading is banned for retail traders in the United Kingdom under rules set out by the Financial Conduct Authority, however it is perfectly legal on a professional basis, and is also legal as an underlying asset for digital banks, as in clients of digital banks can deposit via their e-wallets.
This represents one of many national attempts to regulate cryptocurrency, and is perhaps best viewed as one of the early stages toward full regulation, which is something Coinmetro holds central to its ethos as a company.
From its inception in 2018, Coinmetro began its commercial life with a full cryptocurrency regulatory license from the Estonian government, which is called the Virtual Currency Service Provider License.
The regulatory license grants cryptocurrency companies with full licensing and regulatory oversight for crypto-wallets and custodian services, the first category of services includes the generation and storage of encrypted customer keys and the second category of services is the cryptocurrency exchange for fiat money or vice versa, or cryptocurrency for another cryptocurrency.
This means that Coinmetro took the steps to establish its business from the outset in a nation that is the most digitally advanced on earth, with 99% of all transactions in every area of daily life being conducted online, and has the advantage of complete sustainability as the license will ensure that the exchange can not only operate continually under a government-devised framework which protects users and the exchange itself, but can also grow in order to offer new services.
Since establishing itself as a licensed cryptocurrency exchange, Coinmetro has obtained an E-Money License (EMI) which allows electronic money, that being a digital equivalent of cash stored on an electronic device or remotely at a server, to be held by Coinmetro on a regulated basis. This type of license also exists in the United Kingdom, however firms that are banned for offering unregulated cryptocurrency services will not be allowed to apply for such a license due to their ban.
The requirements for obtaining an EMI license are stringent and complex, therefore the licensing process can take up to a year, however Coinmetro understands that there is absolutely no merit in taking shortcuts when it comes to being compliant with regulations.
The EMI license which Coinmetro holds in addition to its cryptocurrency exchange license allows customers to adopt cryptocurrency and transact in currencies and methods that customers themselves prefer.
The license allows customers to set up direct debits, transfer funds on a payment account with the customer’s payment services provider or with another payment services provider, rather similarly to the systems used by banks.
Currently, Coinmetro is engaged in the legal process which will expand the company into becoming a Multi-Lateral Trading Facility (MTF) as well as a digital asset exchange, with completion of this procedure expected to be within the next 12 months.
Coinmetro’s position is to emphasize its ethos of consumer safety, ensuring fair pricing for using the company’s service, whether to trade the markets, store cryptocurrency, hold a digital wallet or eventually use the new MTF.
The company understands that sustainability and operating within a regulated framework is essential from the very beginning, especially considering that with the EMI license and the forthcoming MTF functionality, Coinmetro will by default become a challenger bank and a cryptocurrency exchange all in one.
It is imperative for cryptocurrency exchanges to be pro-regulation and pro-legislation. For this reason, Coinmetro intends to continue expanding its range of services, and in doing so laying down very strong foundations for the credibility and longevity of cryptocurrency in all aspects of trading, custodian services, payments and storage of value.
The future is ours to shape, but it must be done sustainably and properly, this way, traders and cryptocurrency users will have a constant and reliable place to call their own.