Key facts:
- CZ criticizes the “natural tendency” to regulate cryptocurrencies with the rules of the fiat system.
- According to Zhao, the lack of improvements in the banking sector drives the adoption of cryptocurrencies.
Binance CEO Changpeng Zhao (aka CZ) suggested that country regulators understand the Bitcoin (BTC) industry “in-depth” before regulating the ecosystem. In his opinion, most of the authorities have no experience in the sector.
This was said during the participation in the event Web3 Festival Hong Kong 2023.
For CZ, the leader of the largest cryptocurrency exchange house in the market by trade volume, it is “very important” that the regulatory bodies of the cryptocurrency ecosystem have absolute knowledge of how the market works.
“Most of the regulators have not worked in the cryptocurrency sector before,” which leaves them less experience when it comes to regulating them, he said.
Then he distinguished the reality of the banking sector, where many regulators do know how it works, having worked for years in that industry.
Zhao also criticized the “natural tendency” of regulators to borrow regulations from the traditional system and “just apply them to cryptocurrencies.”
An example is the well-known “travel rule”, sponsored by the Financial Action Task Force (FATF), which obliges exchanges to comply with rules intended for other types of money transfer services. Binance CEO Virtually Participated in Web3 Festival Hong Kong 2023.
In this sense, the CEO of Binance defended that crypto assets are different from banks and traditional financial industries. “There are many different types of assets,” he said.
“Some may be commodities, some may look like utility tokens, some may be something very different, and some have a combination of all those features,” CZ said.
The lack of updates is the current market momentum
For his part, the CEO of Binance spoke of the current momentum of the cryptocurrency market. In his opinion, this push is due to the fact that there are no improvements in the traditional financial sectors, which makes users go to the cryptocurrency ecosystem.
Added to this are the greater restrictions against the banking system, especially due to the current context of the crisis in the United States. And this, CZ argues, ends up pushing more people into the cryptocurrency ecosystem.
In that sense, he stated that it is important that, as companies, “we provide an ecosystem for people to try different things.”
For him, “the best way to keep people in the markets is by lowering fees, facilitating transactions and improving the user experience.” “To make it better,” he added.
