Stock exchanges representatives warn against turning financial assets into cryptocurrencies

[Alfonso Maruccia]

In context: Asset tokenization is a legal and technical process that converts a valuable asset into a digital token. Owners can trade these tokens while transferring ownership, claims, or rights on both tangible and intangible assets, using blockchain-based currencies, including stablecoins.

The World Federation of Exchanges (WFE) recently issued an open letter to major financial regulators urging them to address the rising interest in tokenized assets and cryptocurrency-based equities. The global trade group for publicly regulated stock, futures, and options exchanges is calling on institutions to take a more proactive stance against unregulated tokenization.

The WFE addressed its letter to the US SEC Crypto Task Force, IOSCO's Fintech Task Force, and the European Securities and Markets Authority. It warned that third-party tokens may resemble equities but are not equivalent. Unlike traditional markets, cryptocurrencies can lack transparency, erode investor rights, and fail to provide standard safeguards.

The WFE isn't just focused on minor cryptocurrencies; it's also raising concerns about well-established tokens and blockchain-based assets. Key issues include market fragmentation, gaps in investor protection, custody and enforceability risks, regulatory arbitrage, and potential reputational or legal consequences.

Although the WFE did not cite any specific platform in its letter, crypto exchange operators like Coinbase and Robinhood have advocated for broader adoption of tokenized assets. Supporters say digital equities can reduce trading costs, speed up settlements, and enable around-the-clock trading.

Artists like the Bored Ape Yahat Club have mostly abused tokenization with mass-produced clipart of questionable value. However, companies are now applying it to tangible, valuable assets. Firms in real estate, private markets, and Islamic finance are backing the technology, while major banks and fintechs run pilot programs for asset tokenization.

Federation members are urging regulators to monitor the growing proliferation of digital tokens. They want tokenized assets treated like traditional equities and call for clearer legal frameworks to resolve uncertainties around ownership, rights, and custody.

Financial institutions have not yet responded to the WFE's letter. In July, an SEC commissioner noted that tokenized securities must still comply with existing regulations. Meanwhile, Robinhood recently launched tokenized assets for European investors, and Coinbase is seeking SEC approval to offer tokenized equities on its platform.

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Stock exchanges representatives warn against turning financial assets into cryptocurrencies

 

[redgarl]

Crypto resilience is mainly due to the support of the organized crime. No to mention it is an intangible currency based on pure speculation. It is not an investment or an asset.

 

[Squid Surprise]

Crypto resilience is mainly due to the support of the organized crime.

No - it's due to tons of people using it... provide some evidence that your lie is actually true...

No to mention it is an intangible currency based on pure speculation. It is not an investment or an asset.

As opposed to "cash"? How is that based on anything greater?

 

[Megalomaniac]

A Dollar is 100 cents.
A Quarter is 25 cents.
A Dime is 10 cents.
A Nickel is 5 cents.
A Penny is 1 cent.
A token is whatever I say it is.

The danger of shifting from cash and coin to "tokens" and "digital speculative assets" is they have no true regulation, tracking or insurance behind them. Once you shift your finances to a token, anything can happen. You don't get richer unless someone else gets poorer and is left holding the bag. And that someone absolutely could be you.

You wanna gamble on crypto - that's your choice. I personally don't want my retirement savings, personal savings or the bulk of my investments anywhere near it. The volatility is ridiculous.

And that's what they want. They want pension funds risking it all in crypto so that someone in the shadows can hit the sell button.

If there's anyway to steal money, launder money or hide money legally, this is it.

 

[Kashim]

No - it's due to tons of people using it... provide some evidence that your lie is actually true...

As opposed to "cash"? How is that based on anything greater?

How about you explain where cryptocurrency gets its value then? It has nothing backing it. It is nothing but a pyramid scheme and a zero sum game. The only way YOU can make money off crypto is if someone else loses money on it. How is this a sustainable model? Eventually you run out of people stupid enough to risk their money on crypto, and then what? The whole the collapses once you reach the Sucker Saturation Point where no one else is willing to put money into it.

 

[Steveb8189]

A Dollar is 100 cents.
A Quarter is 25 cents.
A Dime is 10 cents.
A Nickel is 5 cents.
A Penny is 1 cent.
A token is whatever I say it is.

The danger of shifting from cash and coin to "tokens" and "digital speculative assets" is they have no true regulation, tracking or insurance behind them. Once you shift your finances to a token, anything can happen. You don't get richer unless someone else gets poorer and is left holding the bag. And that someone absolutely could be you.

You wanna gamble on crypto - that's your choice. I personally don't want my retirement savings, personal savings or the bulk of my investments anywhere near it. The volatility is ridiculous.

And that's what they want. They want pension funds risking it all in crypto so that someone in the shadows can hit the sell button.

If there's anyway to steal money, launder money or hide money legally, this is it.

Is your 100 dollars worth what it was 20 years ago? Will it be worth the same tomorrow - who knows? I'm not sure it's quite as stable as you believe. You also realise it's far far easier to hide cash or gold than it is crypto?

I think this is a great idea. And of course the exchanges who are currently the people (who make money from people trading assets) want you to believe it's a bad idea.

 

[Megalomaniac]

Is your 100 dollars worth what it was 20 years ago? Will it be worth the same tomorrow - who knows? I'm not sure it's quite as stable as you believe. You also realise it's far far easier to hide cash or gold than it is crypto?

I think this is a great idea. And of course the exchanges who are currently the people (who make money from people trading assets) want you to believe it's a bad idea.

My savings is insured by the FDIC up to $250,000 per account.

My money is backed by the F-16, F/A-18, F-22, F-35, B-2 Spirit and all the nukes they can carry.

Both my houses, my land property, my collections and my pension isn't subject to "crypto winter".

Inflation is real, but crypto in no way is a hedge against inflation.

 

[Megalomaniac]

Is your 100 dollars worth what it was 20 years ago? Will it be worth the same tomorrow - who knows? I'm not sure it's quite as stable as you believe. You also realise it's far far easier to hide cash or gold than it is crypto?

I think this is a great idea. And of course the exchanges who are currently the people (who make money from people trading assets) want you to believe it's a bad idea.

Your cash and gold savings have already been taxed.

Your crypto is subject to 1099k as well. You can't really hide anything. The IRS is always watching.

 

[VitalyT]

Any crypto is a financial pyramid, waiting to collapse, just a matter of time.

When the world starts withdrawing from crypto due to wide collapse and insane volatility, the entire world market will fall into a deep depression, it will no longer be a one-country problem. We are living on a volcano now.

 

[GodisanAtheist]

Is your 100 dollars worth what it was 20 years ago? Will it be worth the same tomorrow - who knows? I'm not sure it's quite as stable as you believe. You also realise it's far far easier to hide cash or gold than it is crypto?

I think this is a great idea. And of course the exchanges who are currently the people (who make money from people trading assets) want you to believe it's a bad idea.

- There are whole *** institutions dedicated to the management and control of the dollar so that it inflates at a low but constant rate of ~2%. These institutions (namely the Fed, but also congress, the IRS in it's ability to remove money from M1 supply etc) have some degree of oversight and must be kept honest, if not by the public at large than the plutocrats whose money they stabilize and control.

In fact, one of the huge strengths of the American dollar is its predictability and worldwide trust in it's management (which is admittedly eroding under the current administration).

Crypto is a pure gambler's currency. The currency is wildly deflationary in the best of times (it keeps gaining value, so why would you ever want to actually spend it on anything if it's worth more 'under the mattress') and monstrously inflationary at the worst (I.e Crypto winter).

As Americans, we have no idea how relatively good we have it. How our currency's purchasing power has historically been among the most stable and we don't find ourselves buying a $2.00 loaf of bread one day and a $12.00 loaf of bread the next, even with the supply shocks of Covid.

 

[maxxcool7421]

Someday all this crypto non-sense will fail, I cannot wait to mock everyone losing all their hidden assets and pulling a 1920's office party

 

[Theinsanegamer]

No - it's due to tons of people using it... provide some evidence that your lie is actually true...

Crypto is stock full of astroturfing schemes, rugpull scams, Pump and dump schemes, and most importantly, wash trading.

Illicit Crypto Ecosystem Report

A Comprehensive Guide to Illicit Finance Risks in Crypto

www.trmlabs.com

Look up any coin and the amount of wash trading is jaw dropping. Everyone is desperately pumping the value up to speculate on their "asset".

As opposed to "cash"? How is that based on anything greater?

Cash is backed by the land, resources, and military of the most powerful country on earth.

Oh yeah, and if I pull my money out of my savings account, the value of my currency doesnt deplete 99% in an hour or shut down the bank for 5 days.

Is your 100 dollars worth what it was 20 years ago? Will it be worth the same tomorrow - who knows?

My $20 is worth $20. That does not change.

How much power that $20 has DOES change, however.

Never do I have to worry if my $20 is suddenly only worth $5 because someone closed out their savings account to buy a car. Also, crucially, even if nobody wants my $20 bill right now, it is still wroth $20. If nobody wants to buy crypto right now, the effective value is 0, because it is not a currency, it is an unregulated speculative security.

I'm not sure it's quite as stable as you believe. You also realise it's far far easier to hide cash or gold than it is crypto?

It's far more stable than crypto, which has crashed 3 separate times since 2008.

I think this is a great idea. And of course the exchanges who are currently the people (who make money from people trading assets) want you to believe it's a bad idea.

Those same people are, by and large, grifters, politicians, and scammers who got banned from trading regulated securities due to fraud.

But you know, it's better to not look too deep into the names pushing crypto the hardest....

 

[Kashim]

- There are whole *** institutions dedicated to the management and control of the dollar so that it inflates at a low but constant rate of ~2%. These institutions (namely the Fed, but also congress, the IRS in it's ability to remove money from M1 supply etc) have some degree of oversight and must be kept honest, if not by the public at large than the plutocrats whose money they stabilize and control.

In fact, one of the huge strengths of the American dollar is its predictability and worldwide trust in it's management (which is admittedly eroding under the current administration).

Crypto is a pure gambler's currency. The currency is wildly deflationary in the best of times (it keeps gaining value, so why would you ever want to actually spend it on anything if it's worth more 'under the mattress') and monstrously inflationary at the worst (I.e Crypto winter).

As Americans, we have no idea how relatively good we have it. How our currency's purchasing power has historically been among the most stable and we don't find ourselves buying a $2.00 loaf of bread one day and a $12.00 loaf of bread the next, even with the supply shocks of Covid.

Crypto has become as polarizing as politics. You're wasting your time trying to reason with people who have drank the crypto Kool-aid. They're convinced crypto is the next big thing and it's magically going to make everyone rich who invests in it. In reality the only way to make money off crypto is for someone else to lose money on it. It doesn't matter what the current value of crypto is, it could be $1 billion per bitcoin, it wouldn't matter. As soon as even 1% of crypto "investors" try to cash out the value drops off a cliff. This is too hard for these people to understand. And of course their solution is for no one to ever try to cash out. As long as no whales try to cash out everyone's a millionaire/billionaire.

 

[NotYourITguy]

Crypto has become as polarizing as politics. You're wasting your time trying to reason with people who have drank the crypto Kool-aid. They're convinced crypto is the next big thing and it's magically going to
make everyone rich who invests in it.

This is likely true.

In reality the only way to make money off crypto is for someone else to lose money on it.

Completely false. Did someone lose $3T because Nvidia became highly valuable? No. The same applies for all tradable assets and commodities. In a pseudo-capitalist market, demand can raise value without a loss occurring.

It doesn't matter what the current value of crypto is, it could be $1 billion per bitcoin, it wouldn't matter. As soon as even 1% of crypto "investors" try to cash out the value drops off a cliff.

Factually untrue. The daily float is often 2-3% for all major coins. Currently almost $100B in crypto could be cashed out daily and it would not be out of the ordinary.

I don't own any crypto and wouldn't buy any, but a lot of this is just outright nonsense.

 

[Squid Surprise]

How about you explain where cryptocurrency gets its value then? It has nothing backing it. It is nothing but a pyramid scheme and a zero sum game. The only way YOU can make money off crypto is if someone else loses money on it. How is this a sustainable model? Eventually you run out of people stupid enough to risk their money on crypto, and then what? The whole the collapses once you reach the Sucker Saturation Point where no one else is willing to put money into it.

It gets its value from BELIEF - the same way "real money" does... if people didn't believe that cash was worth something, it would be worthless...

And cash isn't "limitless" - if you just print more of it, it loses its value...ask the Germans who watched the Deutschmark collapse after World War One...

People BELIEVE that Bitcoin is worth about $111,000 USD... SO IT IS!

Crypto is stock full of astroturfing schemes, rugpull scams, Pump and dump schemes, and most importantly, wash trading.

So is CASH.... so are stocks... so is EVERYTHING... no matter the medium, there will be people out to scam.

Crypto happens to be new and cool, so people are attempting to scam a bit more than other things... but that doesn't make it any more or less susceptible to illegal activity than anything else.

 

[ScottSoapbox]

If the masses take their money out mutual funds and retirement funds, what will the fund managers do?!

Think about Wall street's moguls' kids! Don't make them suffer through a tiny yacht life!

Regardless of what you think of crypto, the fear of losing their fat paydays is pretty apparent and funny. Big business hates competition.

 

[Che Cazzo]

It gets its value from BELIEF - the same way "real money" does... if people didn't believe that cash was worth something, it would be worthless...

"Belief"??? You mean the "BELIEF" in Crapto makes something out of nothing??

People should really know when they have embarrassed and wetted themselves more than humanely possible and stop posting such drivel!!

 

[Squid Surprise]

"Belief"??? You mean the "BELIEF" in Crapto makes something out of nothing??

People should really know when they have embarrassed and wetted themselves more than humanely possible and stop posting such drivel!!

It’s how ALL currencies work… why does the piece of paper that says “$10” become able to buy a loaf of bread?

Currencies aren’t backed by gold any more…

At least crypto is backed by a belief that the internet will remain - perhaps a better bet than thinking certain countries will maintain hegemony in perpetuity.

 

[Che Cazzo]

It’s how ALL currencies work… why does the piece of paper that says “$10” become able to buy a loaf of bread?

Currencies aren’t backed by gold any more…

At least crypto is backed by a belief that the internet will remain - perhaps a better bet than thinking certain countries will maintain hegemony in perpetuity.

Remind me again: Crapto is the same "currency" that is not printed but home-made by any ***** with a PC, whose value went to $5000, then to zilch, and one day it reached $60,000 then back to almost zilch and then pumped and dumped by the likes Lemon Musk (who created his own crapto and used his forum to manipulate it!) and then another famous convicted felon thought he'd make some money on the side while acting as the president of the biggest Third World country...and crapto is so reputable that's peddled by every shady person on the planet??

Funny, how the same people who tell us Social Security is a Ponzi scheme but think crapto is awesome and legit!!

Dude, just put all your savings, assets and pink piggy bank in crapto and call it a day!! I see a GoFundme in your future.

As to "crapto is backed by BELIEF", I think you forgot the Dark Ages and the Invisible Man in The Sky stories are a few centuries behind us.

 

[Squid Surprise]

Remind me again: Crapto is the same "currency" that is not printed but home-made by any ***** with a PC, whose value went to $5000, then to zilch, and one day it reached $60,000 then back to almost zilch and then pumped and dumped by the likes Lemon Musk (who created his own crapto and used his forum to manipulate it!) and then another famous convicted felon thought he'd make some money on the side while acting as the president of the biggest Third World country...and crapto is so reputable that's peddled by every shady person on the planet??

Funny, how the same people who tell us Social Security is a Ponzi scheme but think crapto is awesome and legit!!

Dude, just put all your savings, assets and pink piggy bank in crapto and call it a day!! I see a GoFundme in your future.

As to "crapto is backed by BELIEF", I think you forgot the Dark Ages and the Invisible Man in The Sky stories are a few centuries behind us.

While your rant was amusing, it has no basis in actual fact.
Look at the worth of the US dollar from inception til now… was it always worth the same amount?
Look at various nations’ currencies that collapse when their crooked regime devalues them (sometimes intentionally, sometimes not).

Crypto, by NOT being reliant on any one state - but on a universal technology instead, seems to be a far better bet