Zhao recommends that authorities allow the industry to mature before imposing any regulations.
Crypto exchange Binance CEO Changpeng "CZ" Zhao emphasized the need for regulators to possess a deep understanding of the industry before establishing effective regulations.
Binance CEO shared his thoughts about the crypto industry during a fireside chat at the Hong Kong Web3 Festival, moderated by Deng Chao, CEO of Hashkey Capital.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
What is AAVE in Crypto? (Beginner-Friendly Explainer)
During a fireside chat, Zhao expressed his concern about the inclination to apply traditional financial regulations to the crypto world.
There is a very natural tendency to borrow traditional financial industry regulations to apply to crypto. Crypto is different from banks and traditional financial industries.
During the conversation, CZ emphasized the need for clear crypto regulations, stating that unclear regulatory frameworks are "the worst." He suggested letting the industry develop fully before introducing any restrictions.
Regarding industry players' approach to crypto regulators, Binance CEO urged active engagement with regulators, highlighting that while many regulators worldwide are receptive, some remain skeptical. Nevertheless, he encouraged continued conversations with regulators to address their concerns.
In the conversation with Deng Chao, Binance's co-founder claimed that the attempts of governments to control crypto could inadvertently accelerate mass adoption. He explained that when governments shut down banks or impose restrictions on traditional financial markets, more individuals are pushed toward crypto.
Nevertheless, when asked about regulations, CZ emphasized that crypto industry players should be patient, noting that the first draft of regulations is typically overly restrictive, but eventually, a balance is usually found.
On top of that, CZ highlighted the importance of recognizing how to categorize various crypto assets, as some of them can resemble securities, commodities, or utility tokens.
Binance CEO's ideas echos those of the advisor of the Crypto Council for Innovation, Sean Lee, who also believed that regulators and lawmakers must be well-educated about the industry to be able to create fair crypto regulations.
