Despite their enormous potential, lawmakers and regulators are cautious when it comes tocryptocurrencies. One reason is that they are commonly used as a way to generate andtransfer large sums in the ‘grey zone’ of the internet, thus avoiding taxation. So, to avoidcomplicated legal issues, authorities are refusing to support cryptocurrencies.
The knock on effect of this is to make investors cautious of entering this market because ofconcerns over client due diligence, anti-money laundering legislation and other issuesconnected with the pseudonymous nature of cryptocurrencies.1.2.2 Isolation from traditional bankingAnother key issue is that cryptocurrency exchanges are only beginning to discover the bestpractice needed to keep their trading infrastructure secure from potential malicious activities.As a result, in many exchanges a high degree of technical security breaches are still possible,as well as a lack of legal protection of the assets involved. This is one of the main reasonswhy ordinary financial institutions are avoiding blockchain based markets.
So what are the results? Due to the reasons mentioned above, traditional banking institutionsdon’t accept cryptocurrencies as an asset class, which means they remain unable to providevital financial services to half of the world’s population.1.2.
3 Trading feesThe affect of the current impasse is that sizeable fees remain applicable to both parties incryptocurrency exchange markets. This makes trading costly when it reaches a certainthreshold.At TOKIA, we believe that a blockchain based, well automated exchange should have lowcosts and be affordable to all.Once developed, the whole infrastructure is always there.
Of course, updates and newfunctions are vital, but the most important factor is the ability to provide a complete set ofservices. This means the cost of these individual functions needs to remain low