Binance: Cryptocurrencies a better form of money, countries should embrace it, not ban, says Binance CEO
Zhao was responding to a question on the stance taken by governments across the world, including India on the digital asset. Zhao said that large countries have become more open to the technology that would be a ‘foundational layer for future finances.’
“Usually the first response by default is a defensive one, of trying to ban it etc. But I think over the last two to three years, we’ve seen a lot more governments in large countries adopt crypto,” he said.
“In the long run, I do think governments will learn more about cryptocurrencies. I think the educational effort in the last few years has proven that Bitcoin is not just for the ‘drug lords’, it is a better form of money, it’s going to be the foundational layer for future finances that is important for countries to have.”
Japan legally recognized Bitcoin as legal tender in 2017. Coinbase, a US-based cryptocurrency exchange will be going for an IPO this year. Europe has also developed crypto regulations that allow banks to sell cryptocurrencies.
Slated for discussion and passage in the ongoing budget session of Parliament, India’s Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 was opposed by many stakeholders in the cryptocurrency trading circles and technology industry bodies. They wanted the digital asset to be regulated instead.
In recent days the government has given indications that a blanket ban may not be on the cards. Finance Minister Nirmala Sitharaman last week said that the government is holding talks with the Reserve Bank of India and will take a “calibrated position” on the matter of banning cryptocurrencies.
Binance’s Zhao sees a more favourable relationship between regulators in the coming years. However, he said that the right set of regulations for countries will take a few iterations.
“What’s healthy and what’s will not take a few different iterations to get right. I don’t think it’s possible to get the regulations right the first time, because the technology is changing,” he said.
Bitcoin has seen a rally of over 550% in the last one year, making it a very lucrative asset for many investors.
According to Zhao, the factors that influenced the rise in Bitcoin prices include the halving of Bitcoin, quantitative easing by governments across the world as a result of the pandemic, a flurry of new investors to crypto and the rise of Decentralised Finance among other some reasons.
Halving is a significant event for Bitcoin traders because scarcity underpins the value of Bitcoins. The halving of the Bitcoins means the supply of new bitcoins is reduced. Unlike centralized monetary systems where fresh currency is printed as per requirement, only 21 million bitcoins exist in total. The first halving happened in 2012 and the second in 2016.