Binance CEO Changpeng Zhao, also known as CZ, recently discussed the need for regulators to have a proper understanding of the crypto industry to achieve regulatory clarity. CZ emphasized that applying traditional financial industry regulations to the crypto industry is not a good approach as crypto is different from banks and traditional financial industries.
Different Types of Crypto Assets
During the Hong Kong Web3 Festival, CZ explained that knowing how to classify different assets is important in deciding on regulations for the industry. With many types of crypto assets, some may look like securities, others like commodities, or utility tokens, and some may even have a combination of those characteristics. Therefore, CZ believes that regulators must have a deep understanding of the industry to facilitate proper crypto regulations.
Unclear Regulations are “the Worst”
When asked about his recommendation for a good regulation framework, CZ stated that having unclear regulations is “the worst” and having regulatory clarity is better. He also mentioned that it is best to let the industry develop fully before introducing regulations as it is difficult to predict what exactly is going to be popular in the industry.
Active Engagement with Regulators
In terms of industry players’ approach towards crypto regulators, CZ advised that there is a need to be very actively engaged with them. He explained that although many of the crypto regulators around the world are very receptive, some are still very skeptical. However, skepticism should not deter crypto industry players from engaging the regulators in conversations.
Trigger for Mass Adoption of Crypto
CZ also discussed what could trigger mass adoption of crypto. He said that the fact that many governments are trying to come for crypto may actually be the trigger to make crypto grow. The government’s efforts in shutting down banks, fiat access, and putting more restrictions on the traditional financial markets actually push more people towards crypto.
Patience is Key
CZ stressed the need for crypto industry players to exercise patience. He said that understanding that the first draft of regulations is always likely overly restrictive is important and, in just a matter of time, a balance is usually found.
Hong Kong Supporting Web3
Hong Kong recently showed support for Web3 by taking major steps to develop the Web3 industry. The Hong Kong Web3 Festival, where CZ spoke, is one of the initiatives to foster the growth of Web3 in Hong Kong. By supporting the development of the Web3 industry, Hong Kong is positioning itself to be a leader in the next generation of the internet.
Conclusion
CZ’s emphasis on the need for regulators to have a deep understanding of the crypto industry is crucial to achieving regulatory clarity. Having regulatory clarity is important for the industry to grow and develop. By being actively engaged with regulators, industry players can help facilitate proper regulations. The fact that many governments are trying to come for crypto may actually be the trigger to make crypto grow, and it is important for crypto industry players to exercise patience while waiting for regulations to be established. Finally, the support of initiatives like the Hong Kong Web3 Festival is essential in fostering the growth of the Web3 industry.
