8th October 2025 Digital Bytes
Centralised v decentralised exchanges (Part2) - centralised exchanges provide high liquidity, rapid transactions and predictable fees but rely on user trust. However, failures in transparency, as seen in FTX’s collapse, can have systemic consequences. Centralised exchanges, whilst non-custodial and permissionless, often suffer from lower or fragmented liquidity and unpredictable trading costs due to slippage and volatile network fees whereby making execution and pricing less certain. Ultimately, users must weigh the choice (regulatory safety and convenience versus sovereignty and operational risk), so aligning with individual priorities and risk appetite.
Dark pools: the quiet engine of institutional trading - dark pools have long powered institutional trading from the shadows, allowing investors to move billions without jolting markets. Today, they handle a large share of equity volume, praised for reducing costs and slippage but criticised for eroding transparency. Now the concept is leaping into crypto where stablecoins and tokenised assets fuel experiments with decentralised dark pools. Advocates say they could bring efficiency, privacy and stability whilst critics warn of deepened inequality and weakened price discovery. The real question is whether these hidden venues will evolve into a fairer global liquidity engine or remain tools for the market’s elite.
Unpacking the GENIUS Act and other upcoming US legislation The GENIUS Act, signed into law in July 2025, establishes the first US regulatory framework for payment stablecoins, mandating 1:1 reserves in dollars or treasuries with strict audits and disclosures. It signals America’s embrace of private innovation over CBDCs whilst raising fresh debates on consumer protection and systemic risk. The Clarity Act is due to be passed later this year and aims to provide greater regulatory clarity to enable the tokenisation of almost any form of asset. Combined these acts put the US in a commanding position when it comes to digitisation of money and asset.
Are we to see dollarisation of the UK? The Bank of England’s struggle with the USD stablecoin revolution - the rise of USD stablecoins is driving global dollarisation could the UK succumb too, with these tokens now surpassing $250 billion in market capitalisation and comprising over 90% of stablecoin use? The US leads with agile regulation whilst the Bank of England and UK Treasury face criticism for slow, risk-averse responses and strict ownership caps. Without reform, the UK risks becoming a satellite to US financial influence, marginalising the pound in digital finance.