Cryptocurrency Changpeng Zhao (CZ), CEO of the exchange Binance, shared his thoughts on the latest crisis that gripped the crypto world in his latest statement.
As it is known, with the collapse of Silicon Valley Bank in the USA, the price of USDC, the second largest stablecoin in the crypto money world, experienced a sudden decrease and lost the 1 dollar fixed it should have been.
Binance CEO Changpeng Zhao Argues That Failed Companies Should Pay Their Customers First
Binance CEO Changpeng Zhao, who previously made statements about the need for a new bank in the crypto money world, addressed his followers with a different approach this time. Zhao argued that customers should be rescued, not bankrupt banks:
“Once you do a rescue operation, you find yourself in a dilemma. If you’re not going to do the recovery this time, why don’t you? You have to. By diluting the value of all your citizens’ money, “you need to protect customers.
If you bail out, banks have 0 incentives to manage risk. It would be foolish to not take maximum risk for maximum return and not split the rewards as soon as you get them. When you sink, you get a rescue package.
Rescues encourage taking greater risks, which requires more recovery…
It’s a difficult problem.
Maybe… I’m just thinking out loud. Maybe we just save consumers. We relieve their suffering. Then we close the bankrupt business and get some executive salaries back (this part can be a little tricky).”
Once you do one bailout, you end up in a dilemma.
If you don’t bailout this time, why not? You were suppose to. To “protect consumers”, by diluting all your citizens.
If you do bailouts, then banks have 0 incentive to manage risk. It would be stupid not to take max risk for max… https://t.co/rIXZUNx5mr
— CZ 🔶 Binance (@cz_binance) March 12, 2023
However, CZ responded to a follower who contradicted himself that he originally planned to save FTX:
“It is not a bailout (not like printing money) for one business to buy another with hard-earned money.”
*Not investment advice.
For exclusive news, analytics and on-chain data Telegram our group, twitter our account and YouTube Follow our channel now! Moreover Android And iOS Start live price tracking right now by downloading our apps!