Binance CEO Changpeng Zhao believes that digital asset market regulation is not as “bad” as many blockchain enthusiasts perceive it to be. During a recent conference at the Clubhouse, Zhao stated that he would like to promote the presence of regulators in the industry to a certain extent.
According to him, this will only help accelerate the adoption of Bitcoin and altcoins around the world. Let’s talk about the point of view of a famous entrepreneur in more detail.
By tradition, let’s start with an explanation. The first cryptocurrency Bitcoin was created in response to the actions of banks that led to the 2008 crisis. Its feature – as well as other coins – is the exclusion of the role of an intermediary between the parties to financial transactions. That is, to transfer ethers or BTC, you do not need to ask permission from regulatory bodies or receive certificates, since there is none of this in the decentralized network. In addition, its members are equal.
Because of this, there are many people in the niche today who oppose the regulation of the industry. Moreover, it is necessary for the activity of cryptocurrency exchanges and other companies operating officially.
The creator of the Binance exchange, Changpeng Zhao, has a clear opinion on this topic. And it may be different from many rule-less lovers.
Why cryptocurrencies need regulation
Here is a quote from Changpen on this occasion, in which he shared his vision of what is happening. The cue is from Decrypt.
If I were a regulator, the most logical thing I would do is take a look at the existing rules in the traditional financial space and transfer them to the crypto market.
That is, Changpen believes that the existing rules of regulation will be quite enough for working with cryptocurrencies on the part of various financial authorities. And on top of that, they have to fit a new area.
The Binance CEO also added that he – unlike many others in the industry – is not a libertarian or anarchist.
There are many extreme libertarians who believe that we function well without any rules, without any government interference. I don’t think that as a society we are quite ready for this. At least, in my opinion, I do not know how we can secure ourselves in this area.
Accordingly, the entrepreneur does not consider the absence of restrictions and rules to be a good environment for the popularization of cryptocurrencies. From Changpen’s point of view, such conditions will not lead to mass fame and widespread use of blockchain-based assets. And this is understandable: nevertheless, many conservative investors are in no hurry to get involved with coins precisely because of the lack of clear regulation. Of course, they waste time and opportunities, but this is a fairly common position.
By the way, Binance itself has a difficult relationship with regulators, although so far the exchange’s success has been interpreted by the thoughtful actions of its management in the face of potential government oversight. As a reminder, Binance left China in 2017 when the government took harsh measures against local cryptocurrency exchanges. The company moved to Japan, then Taiwan, and then in 2018 Binance tried to take root in Malta.
The company is now officially registered in the Cayman Islands, but it doesn’t have a network of head offices or anything like that. Changpen continues.
We do not have a single monolithic system developed by thousands of people in my office.
Last July, the Malaysian Securities Commission announced that Binance was operating illegally in the country. Representatives of the company refused to comment on the situation, but then a statement was made that the crypto exchange was doing well. During an interview in November 2020, Zhao described the regulatory rules as “overly restrictive,” but this time he noted that “some degree of regulation” still needs to be present in the industry.
Lack of rules is also bad for business. I know other companies in the industry looking to improve relationships with regulators.
Either way, the digital asset industry is already valued at more than $ 2 trillion, meaning it has grown too big to be ignored by regulators. In such a situation, their interference in the rhythm of the crypto market is already inevitable, which means that there is logic in Changpeng Zhao’s point of view.
It is important to remember that the network of Bitcoin, Ethereum or other cryptocurrencies can work as long as there is at least one participant in its network. Even if all miners suddenly suddenly stop mining BTC, over time, the blockchain will return to normal. So, it’s definitely not worth worrying too much about possible government initiatives.