Op Ed: From East to West: The Fiat Pairing Trend Grows in the United States
The recent announcement that Bittrex will allow investors to buy digital coins with the U.S. dollar is the latest in a string of crypto trading trends to move West from Asia. With Japan and Korea among the first to facilitate an open and active trading ecosystem with fiat pairing, it’s clear that the Asian region is a nexus for global crypto trends.
In a part of the world where trading volume dominates and several countries have taken an “innovation first, regulation second” approach to crypto industry advancement, the impact of the region on the global crypto market — good and bad — is one that is often underestimated. Indeed, while Bittrex is one of the largest cryptocurrency exchanges, currently sitting at 20th by coin market capitalization with a daily trading volume of $85 million, Asia is in fact home to nine of the top 10 exchanges, with a combined daily trading volume of more than $5 billion. Of these exchanges, two offer fiat pairing.
Increased fiat pairing is an obvious cause for celebration among crypto traders, but what about the impact of widespread implementation on the global crypto economy? The growth of fiat pairing could, in fact, have far-reaching implications beyond increased trading volume and opening up the industry to new, mainstream customers who find first generation trading too confusing and time-consuming.
The move could also mean a more seamless integration with the mainstream financial market, paving the way for new financial instruments to be created and made available to consumers. This could also incentivize more financial institutions to enter the market, leading to better transparency, reliability, and financial education and inclusion.
While Asia’s high trading volume alone — with Japan dominating bitcoin trading and Korea driving the altcoin market — makes the global crypto community stand up and take note, fiat pairing is just one of the many ways the region can be considered a global trendsetter.
Faced with regulatory uncertainty in the U.S. and parts of Europe, the blockchain industry has taken solace in Asia’s open-mindedness to technological advancement, despite the region’s latest round of judicial confusion in South Korea. Government agencies, particularly in Japan, have fostered a more liberal, business-friendly approach to test out new initiatives, incentivizing and encouraging self-policing but also allowing a more relaxed environment for ongoing education and a better understanding of this infant industry.
Even with China’s blanket ban and misconception about trading regulations in South Korea, the market itself continues to flourish. Regionally, the focus has always been on targeting the best developers in each country to propel technological advancement, regardless of the latest bumps in the road from the regulatory side on trading. Moreover, Asian markets face similar barriers for growth as the U.S. market: Know Your Customer and Anti-Money Laundering (KYC/AML) processes, taxation and a lack of clear legislation. However, the region’s many champions of blockchain and distributed ledger technology continue to work toward making its potential to transform businesses and improve quality of life a reality.
Lessons learned from Asia are important to acknowledge. These lessons help to assess global market movements and give us glimpses of what might be coming next. Another trend that may make its way from Asia to the U.S. and other Western markets is an increase in retail investors.
Historically, the Asian stock market has been driven by this particular group of traders, while the U.S. market is almost entirely driven by institutions. The U.S. is seeing more institutions enter and dominate the crypto market; meanwhile, the increase in fiat pairing and eventual regulatory clarity, combined with increased education and new technological developments that will make trading easier and bring blockchains into our daily lives, all promise to gradually facilitate opportunities for retail investors to follow Asia and become a force to be reckoned with in the U.S. and Western crypto market.
This is a guest post by Zhuling Chen, co-founder of aelf. Views expressed are his own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.