$76B a Day: How Binance Became the World’s Biggest Crypto Exchange

> Financial regulators increasingly worry that digital assets, until recently dismissed by some as a fad, have grown so quickly they now are systemically important. In an October speech, Bank of England official Jon Cunliffe brought up the 2008 subprime-mortgage-fueled crisis and said of crypto, “When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice.”

How can anyone argue that crypto is "systematically important" and would require federal intervention if it collapsed? That's the problem with looping in all these organizations into a regulatory framework. The regulators tell banks follow these rules to be safe, banks blindly follow them without regard to if they're smart. So when CDO-squares were rated 70% triple A and were trading at LIBOR+5bps, no one batted an eye. Then when it blows up, the banks go to the regulators and tell them we followed your rules. So bail out makes sense and everything is correlated since everyone was following the same stupid rules.

You see conservative measures now in these crypto exchanges. For instance, you can't transfer coins bought on binance for 7 days after buying them. When regulators get involved they'll tell people all exchanges are the same and protected. They'd put reserve requirements on coins, like they did on shitty CDOs in financial crisis, and the entire industry would lever up. They'll tell exchanges the exact safety protocols that they have to follow and introduce correlated risk into the system when there is a flaw. Since every exchange would essentially be the same and following the same rules, exchanges will have to lever up to compete. Right now different exchanges sell themselves with different safety protocols.

I say don't loop them in and don't bail them out. If its straight fraud, sure. But lets not institutionalize and give cover to these extremely speculative assets.

If Bitcoin is decentralized what are these centralized exchanges doing?