“A bank that refuses to work with crypto is like a bookstore that refuses to work with the Internet,” Changpeng Zhao, founder and chief executive of the world’s largest bitcoin exchange, Binance, tweeted on May 7. The comments came amidst ICICI Bank and other major banks. cut off banking services and payment gateways to crypto platforms in India. In an interview with ET Apoorva Mittal, Zhao said a lack of understanding among Indian regulators and regulatory inconsistencies could potentially drive several multi-billion dollar companies out of India. Edited quote: What do you think about banks and payment gateways in India cutting off access to crypto exchanges? several multi-billion dollar companies from India.
What do you think about banks and payment gateways in India cutting off access to crypto exchanges?
This is not a smart thing to do. This may come from fear or a lack of understanding of cryptocurrencies. Some countries encourage innovation in industry and others resist. Those who reject it may protect some of their legacy institutions for a short time, but they will be destroyed in the long term due to technological innovations in industries such as decentralized finance (a form of blockchain-based finance that does not rely on central financial intermediaries like banks and brokerage.)
What are the implications of this position?
Whatever the reason, if you cut off access to new technology, you don’t have to slow down the development of that technology in that area. For example, maybe more than 50% of the innovations in decentralized finance come from the US today because they have very positive and clear regulations for cryptocurrencies. India may have the same or perhaps higher number of engineers than the US, but there is not much innovation there.
How do you support WazirX (Binance acquired Indian cryptocurrency exchange in 2019) through this change?
We can help them in limited ways. We can’t give them banking access. We are trying to increase understanding of cryptocurrency among ordinary people and regulators alike. However, we didn’t have much discussion with regulators in India. We are also trying to improve the regulatory environment in other parts of the world.
People don’t know what they don’t have. India may lose some $ 50-100 billion worth of listed companies due to a restrictive environment. In the US, over the next five to 10 years, we’ll probably see at least a dozen $ 100 billion-plus companies (Coinbase’s $ 100 billion crypto exchange on its Nasdaq debut). This is a very large part of the economy. It would be like losing Google or the kind of organization you can have today.
What mechanisms does Binance have in place to prevent fraud and illegal activity on the platform?
We have a sizeable anti-fraud and compliance department that is the same as a traditional banking and e-commerce company. With blockchain, there are actually additional advantages. Most blockchains are transparent, meaning you can track transactions over time. So, it’s actually easier to track down some bad actors. We use blockchain analysis tools and many other tools specifically for this purpose. At Binance, the activity is less than 0.01%.
Source : Economictimes.indiatimes.com
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