While many parts are up for interpretation from Coinbase's Digital Asset Framework that lists the prerequisites a cryptocurrency requires to qualify for listing on the popular exchange, one measure can help hone down possibilities. Whether or not a cryptocurrency has a fiat trading pair on the market filters down possibilities remarkably. Can listings by cross-town exchange Kraken provide further insight?

A correct outlook as to the next cryptocurrency that could get listed on Coinbase could bring speculators massive gains, as the regulatory conscientious exchange would give the newly added coin a bulls run. This has been very evident with Ripple whose price shoots up on every tiny little rumour of potential listing on the exchange.

Coinbase has had to deal with a myriad of criticism from the crypto community because of customer service issues, delays in implementing SegWit support, lack of transaction batching, and the abrupt listing of Bitcoin Cash, which resulted in a class-action lawsuit for insider trading.

But the digital currency exchange has been as transparent as a business can be with their Digital Asset Framework that lists, in 6 sections and 45 points, the criteria a coin must meet to qualify for listing on the exchange.

|| FIAT SHALL RULE

The irony is not lost on anyone that one criteria for a potential listing of a coin by the cryptocurrency exchange would require a fiat trading pair to exist on the market (section 4.2). This requirement markedly brings down the potential cryptocurrencies, for now atleast, as there remain few regulated exchanges with fiat trading pairs (see table).

1: Key Exchanges with Fiat/Crypto Trading Pairs1

wdt_ID Exchange HQ # of Coins with fiat 1 Upbit South Korea 125 35 2 Bithumb South Korea 12 12 3 Kraken USA 16 13 4 Bitstamp UK 5 5 5 Coinone South Korea 9 9

Notes: 1. Excludes exchanges with same cryptocurrencies as Coinbase and are within the top 20 exchanges in trading volume.

10% of Exchanges Near 50% of Total Crypto Trading Volume...

Top 20 Exchanges Volume: Crypto Only vs. Exchange with Fiat Pairs

Number crunching shows that exchanges outside the top 20 account for less, each, than 0.3% of total global trading volume. And with only a handful of exchanges in the top 20 with fiat possibilities, coins outside of them would face poor liquidity.

|| SLIM PICKINS

Of the top exchanges who support fiat only 38 possible coins with a fiat/crypto trading pair exist, including the 4 on Coinbase. This represents a meagre 2% of all the coins that are currently traded on all cryptocurrency exchanges.

|| THE KOREAN DIVIDE

Coinbase makes a point as to where the cryptocurrency is available to trade, saying the asset must not be "limited to a single geographic region." This puts a bit of a question mark on cryptocurrencies traded on South Korean exchanges where regulators only allow its nationals to trade on the platforms.

The caveat could be a stopgap to reduce potential volatility should a region fall out of its love affair with a certain cryptocurrency. Cardano, which impressively fluctuates within the top 5 coins by market cap is a prime example. A whopping 65% of global volume traded is on a single South Korean exchanges alone, albeit, with a fiat/crypto pair.

The prerequisite could also be aiming to mitigate the risks of potential regulatory issues that may arise in a single country. And not without reason. Earlier this year, South Korean regulators caused a market selloff with conflicting statements from various agencies about banning cryptocurrencies ( Diar, 22 January ).

Kraken Trading Distribution in US, Europe Almost Evenly Split

Notes: *7% Crypto/Crypto volume, under 1% CAD, JPY & GBP

Outside of South Korea, and UK based Bitstamp who offers Ripple as well as the other majors, Kraken is the only fiat exchange that has leaped into a larger offering, with an additional 12 coins – 9 of which have a fiat trading pair (see table 2).

And in terms of regional distribution of traded volume, Kraken has captured both major markets in the US and Europe, based on its fiat trading numbers (see chart above). The added benefit that Kraken could be setting a precedent as a regulated exchange on US soil.