A Review of Crypto-Trading Infrastructure

51 Pages Posted: 28 Sep 2023 Last revised: 13 Jan 2024

See all articles by Yuxi Chen

Yuxi Chen

World Federation of Exchanges

Pedro Gurrola-Perez

World Federation of Exchanges

Kaitao Lin

World Federation of Exchanges

Date Written: August 29, 2023

Abstract

The paper offers a snapshot of the evolution of crypto-trading platforms across different jurisdictions and reports the exchanges’ engagement with these developments and their views on the future opportunities or challenges that these new technologies bring. It also provides an overview of the setup and operation of crypto-trading platforms, contrasting the models of centralised platforms (CEXs) with those of the decentralised platforms (DEXs) and studies the implications that the differences in model design between DEX and CEX have on liquidity provision, price discovery and the custody of assets. The paper reviews the academic literature findings about the market microstructure of these platforms. In addition, it discusses what these differences may imply in terms of three fundamental aspects of financial markets regulation: anti-money laundering, prudential regulation and financial stability, and investor protection.

Keywords: Crypto-trading, CEX, DEX, DeFi

JEL Classification: G10, G18

Suggested Citation

Chen, Yuxi and Gurrola Perez, Pedro and Lin, Kaitao, A Review of Crypto-Trading Infrastructure (August 29, 2023). Available at SSRN: https://ssrn.com/abstract=4560793 or http://dx.doi.org/10.2139/ssrn.4560793

Yuxi Chen

World Federation of Exchanges ( email )

125 Old Broad Street
London, EC2N 1AR
United Kingdom

Pedro Gurrola Perez (Contact Author)

World Federation of Exchanges ( email )

125 Old Broad Street
London, EC2N 1AR
United Kingdom
EC2N 1AR (Fax)

HOME PAGE: http://www.world-exchanges.org

Kaitao Lin

World Federation of Exchanges ( email )

125 Old Broad Street
London, EC2N 1AR
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
255
Abstract Views
735
Rank
230,597
PlumX Metrics