Speaking today about cryptocurrency regulations during the Hong Kong Web3 Festival, Binance CEO CZ stated that officials should have a deep understanding of the industry.
Binance CZ: Regulators need a deep understanding of crypto for proper rules
Binance CEO shared his thoughts on the future of CeFi, the need for crypto regulation and mass adoption on Web3. According to CZ, “There is a very natural tendency to borrow traditional financial sector regulations to apply to crypto. Crypto is different from banks and traditional financial industries.
CZ then went on to explain that since there are many types of cryptocurrencies, knowing the answers to simple questions like how to classify different assets is important in deciding regulations for the industry: “Some coins may look like securities, others may look like commodity or utility tokens, or even some may have a combination of these traits.”
Ideal regulatory framework according to Binance CZ
In this regard, CZ said it’s “the worst” to have vague regulations, and it’s better to have regulatory clarity. He went on to say that it is best to let the industry develop fully before introducing regulations. The particular reason for this is that it is difficult to predict exactly what will be popular in the industry.
Regarding their approach to crypto industry players and crypto regulators, CZ recommended that there is a need to engage with them very actively. He explained that while many of the crypto regulators around the world are very understanding, some are still very skeptical. However, skepticism should deter crypto industry players from involving regulators in conversations.
Can CeFi and DeFi coexist?
Binance CEO argues that CeFi is not against DeFi. While DeFi and CeFi have some differences, some decentralization can coexist in decentralized platforms.
CZ also said that it is difficult to predict the trigger that will lead to mass adoption in the next crypto and Blockchain bull. Referring to ICOs in 2017 and NFTs in 2021, the trigger for mass adoption may change over time.
The Binance CEO later highlighted the need for regulatory clarity, saying that “using sanctions to control crypto is bad,” adding: “Regulators need to understand that crypto is different from banks, they are different types of crypto assets. It is very important for regulators to have a deep understanding, but many do not have crypto experience.”
Next bull trigger
Responding to what might trigger the mass adoption of crypto, CZ said that the pressure from many governments to crypto may actually be the trigger to grow crypto. He explained that the government’s efforts to close banks, access fiat money, and impose greater restrictions on traditional financial markets are actually pushing more people towards crypto.
Finally, CZ emphasized that crypto players need to be patient. He said it’s important to understand that the first draft of regulation is always likely to be overly restrictive, so a balance is often found in just a matter of time. cryptocoin.comAs you follow, Binance has spent weeks facing intense pressure from US regulators.
Hong Kong announces new regulations for DeFi and DEX platforms
Meanwhile, speaking at the same event, Cai Zhonghui, interim chairman of the Hong Kong Securities and Futures Commission (SFC), reported that certain altcoin companies may be subject to licensing requirements.
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