“There’s no way to prevent failures in a new industry. The only way to prevent this is to do nothing and not innovate,” according to Changpeng “CZ” Zhao, who spoke via video feed at the Consensus 2022 conference.
Responding to criticism that there still is no real use case for bitcoin, and that it’s not proven its safe haven credentials, the Binance founder reiterated that crypto industry is still in its early days, and compared it to the advent of the internet in 1995.
“Many of the models may work or not work that well, but the technology is here and has such potential. But there may be people who just won’t see that,” Zhao said at the session “Why Crypto Matters,” which closed the conference in Austin, Texas on Sunday.
Thoughts on regulation
The world’s biggest crypto exchange, which has received criticism in the past for being a “wild west,” has been moving into the heavily regulated space, having received numerous licenses over the past few months, including in France, Bahrain, Abu Dhabi, Dubai.
But Zhao said it was also important to make a distinction between good regulation and over-regulation, as the latter would stifle innovation. He highlighted that the classification of cryptocurrencies is very important, and they should not be put into one bucket, given their various asset types and use cases they present.
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He recommended that governments set up a new regulator for this industry, such as in Dubai, where the Virtual Assets Regulatory Authority (VARA) is tasked regulate virtual assets in and protect and regulate stakeholders.
“Some degree of regulation is necessary, but the industry also has the capacity to self-regulate in certain areas,” Zhao said, noting that regulators should take a relaxed approach to certain areas to be able to see how the industry grows and develops.
Thriving in winter
On the topic of the ongoing “crypto winter,” Zhao said this isn’t the first for him or Binance, which has a “decent” war chest and is currently expanding hiring and M&A activity. He said the platform is considering lowering fees and took a jab at its rivals for profligate spending on Super Bowl sponsorships and stadium naming rights.
“We will leverage winter to the max,” he said.
Finally, reflecting on the recent Terra/Luna crash, which he described as “not quite a scam, but a massive failure,” Zhao agreed that exchanges should play a more proactive role in protecting investors, and encouraged industry peers to invest more in education and warning investors about risk much better.