Most Cryptocurrency Trading Moves Through Malta-Based Exchanges, Morgan Stanley Shows

  • Morgan Stanley research found that most cryptocurrency trading flows through Malta, thanks to top cryptocurrency exchange Binance.
  • While most crypto exchanges are based in the UK, these only see 1% of the market's trading volume.

Morgan Stanley research has found that the vast amount of cryptocurrency trading volume, nominally, flows through the small island nation of Malta, although the majority of cryptocurrency exchanges are based in the United Kingdom.

In a note Morgan Stanley analyst Sheena Shah and her team sent to clients examining cryptocurrency exchanges throughout the world, it was noted top cryptocurrency exchanges see trading volumes in the billions on a daily basis.

Per the investment bank’s research, top cryptocurrency exchange Binance helps Malta take the number one spot for cryptocurrency trading volume, as without Binance “Malta would be much further down the list.” The team’s note reads:

"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's note

The United Kingdom is currently the location with the largest number of cryptocurrency exchanges, but according to Morgan Stanley it only sees 1 percent of global cryptocurrency trading volumes. After the UK, Hong Kong and the United States are the countries with the most cryptocurrency exchanges.

Shah noted that in India, a country in which the central bank has turned its back on crypto-related accounts, there are six cryptocurrency exchanges. According to the analyst, these will likely have to shut down or relocate because of the financial institution’s move.

As Markets Insider notes, cryptocurrency exchanges have recently come under increasing scrutiny from regulators throughout the world, as an increasing amount of money keeps entering the market. While countries like India decided to crackdown on cryptos, countries like Malta and Switzerland are trying to attract crypto startups.

Per Morgan Stanley’s research, attractive regulations help a cryptocurrency exchange choose one country over another. Regulatory certainty helps companies, as it allows them to plan for the future knowing what to expect. Low taxes, Shah noted, also help.

As for the blockchain and cryptocurrency industry, the note reads:

"The blockchain and cryptocurrency industry is growing rapidly and can have economic benefits for a particular country through the creation of start-ups (good for jobs), research and development and financial transactions. Governments are having to consider their regulatory stance quickly.

Morgan Stanley's note