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The World Federation of Exchanges (WFE) has put forth six key principles for crypto trading platforms (CTPs) that are serious about meeting the standards expected of credible market operators. These include segregating market infrastructure functions, having in place systems and controls, holding sufficient financial resources to meet expected operational stress events, facilitating compliance with best execution requirements, increases robustness of listing standards, and having appropriate governance and management requirements. https://www.world-exchanges.org/news/articles/wfe-publishes-research-exchange-engagement-crypto-market-functioning-development

The World Federation of Exchanges (WFE) published good practice recommendations for crypto-asset custody providers. These include segregating client assets to ensure they are protected in the event of a company's bankruptcy, ensuring client assets remain bankruptcy-remote, having adequate insurance and/or surety bonds and disclose these policies in clear understandable terms, and seeking independent audits from reputable and credible auditors to provide an assessment of financial statements, process and controls.

The World Federation of Exchanges encourages global standard-setting bodies to generate a taxonomy for all global stablecoins (GSCs) and crypto-assets. In adopting the use of a global taxonomy, a common understanding would develop of whether a GSC or crypto-asset fits a certain classification or definition (eg do the features of the crypto-asset meet the definition/classification of a security) which would, in turn, reduce the variance in application of regulation, to GSCs/crypto-assets, between jurisdictions. Whilst differences might remain across the globe in securities regulation itself, the fragmented approach to the type of GSC/crypto-asset which falls under that regulation would potentially be reduced. This results in a more universal application of regulation, especially if the principle of 'same business, same risk, same rules' is applied and is focused on regulatory objectives and outcomes.

The World Federation of Exchanges (WFE) published a paper on the causal relationship between distributed ledger technology (DLT) settlement latency and market quality in the cryptocurrency domain. Focusing solely on public permissionless DLT networks, it finds that settlement latency significantly lowers liquidity and increases transaction costs. In addition, through the Huang and Stoll (1997) spread decomposition, we document that DLT settlement latency reduces the adverse selection costs and increases the inventory management costs faced by liquidity suppliers. Moreover, these effects are more pronounced in smaller trading venues and for the native cryptocurrency of the settlement blockchain. More broadly, this paper highlights the balance between decentralized, near-instantaneous settlement cycles offered by DLT and the potential adverse impacts on market quality.

The World Federation of Exchanges (WFE) published a paper on tokenization that concedes that that it has many benefits that may make it the natural next step for financial markets, but that it requires substantial upfront investment without clear gains in markets that are already highly efficient. It found that the primary benefit of tokenization is fractionalization. And by making fractional assets available to a larger pool of investors, there's potential to enhance liquidity. However, as highlighted by Ledger Insights, the paper seems to mix up the separate concepts of atomic settlement, one of tokenization's key benefits, with instant delivery versus payment (DVP) "atomic" settlement, ignoring the fact that batching and netting can still be achieved when settlement is atomic. https://www.world-exchanges.org/our-work/articles/demystifying-tokenisation-embracing-future