Crypto chiefs say ‘the tide is turning’ on regulation

Changpeng Zhao, founder and CEO of Binance, spoke at the Blockchain Week Summit in Paris, France, on April 13, 2022.

Benjamin Gerrett | Bloomberg | Getty Images

PARIS – The cryptocurrency world may have passed a turning point when it comes to regulation.

The chiefs of several major crypto companies have told CNBC regulators that they are beginning to take a more positive approach to digital currencies, after Many campaigns Space targeting.

While China has banned cryptocurrencies outright, countries like the United States and Britain have announced steps to bring regulatory oversight into the emerging market.

“The tide is definitely changing,” Zhao, CEO of Binance, the world’s largest cryptocurrency exchange, told CNBC on the sidelines of the Blockchain Week summit in Paris.

Last year, British regulators banned Binance from conducting any regulated activity in the country, while in Singapore, Binance limited its services after the central bank warned that it could be in violation of local regulations.

In his opening speech on Wednesday, Zhao said that regulatory discussions around cryptocurrency have shifted from “negative” to “positive.”

Prior to Zhao’s introduction, the event’s MC referred to the crypto slang term “wagmi,” which stands for “we’re all going to make it.”

“Honestly, I feel like we sort of succeeded,” he said, adding that the cryptocurrency acts as a file The lifeline for some in Ukraine amid the Russian invasion.

But the cryptocurrency world still has a long way to go before it reaches widespread acceptance. The fate of the industry depends to a large extent on the approaches taken by the various global regulators.

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Governments are taking action

“The regulatory landscape around the world is evolving very rapidly,” Nicholas Carey, co-founder of crypto wallet maker Blockchain.com, told CNBC.

The UK government announced last week that it will introduce stablecoins – digital assets that track current currency rates such as the US dollar – into the domestic payments system.

British Finance Minister Rishi Sunak has also asked the Royal Mint, which is responsible for producing the country’s coins, to create a non-fungible token, or NFT, the cryptographer’s answer to collectible rare items.

“The UK could be a dark horse in this whole situation,” Carey told CNBC.

“After Brexit, they kind of have a political decision to make and a strategic decision,” he added. “Are they rebuilding Brussels in London, or are they becoming Western Singapore, calling in all this innovation, all this technology and all this generation of wealth and really owning the future of the web?”

Governments want to foster innovation around financial markets and the potential next generation of the Internet, known as “Web3,” crypto executives told CNBC.

But they are also wary of the industry’s dark side, including money laundering and other illegal transactions, and the environmental impact of energy-intensive bitcoin mining.

In the United States, President Joe Biden recently signed an executive order urging government-wide coordination on digital assets. Industry insiders say one of the main concerns of Western regulators is the use of digital assets to evade Russian sanctions.

“I think they’re starting to take it seriously [but] I don’t think they get too warm and fuzzy about it, Arthur Breitman, co-founder of Tezos, a blockchain protocol that rivals Ethereum, told CNBC.

“Of course, they will have a conservative bias,” Breitman said. However, he added that only a “tiny portion” of cryptocurrency payments are related to criminal activity.

Illegal activity represented less than 0.2% of cryptocurrency transactions in 2021, according to data from blockchain analysis firm Chainalysis.

attack magic

Binance’s Zhao told CNBC that France is “very progressive and very welcoming towards crypto.” “They are much more advanced in their understanding.”

Binance turned magic in Paris this week, announcing its “Web3 and Crypto” startup acceleration program in partnership with business incubator Station F.

It comes as the company previously boasted of not having an official headquarters and is now looking for a global head office.

“We will definitely have our regional headquarters for Europe in Paris,” Zhao said. “We will set up a number of regional headquarters first before going global.”

Binance now has licenses in Bahrain and Dubai, and provisional approval in Abu Dhabi. In Europe, it is supervised by Lithuanian anti-money laundering regulators and is seeking registration with the Swedish Financial Services Supervisory Authority.

The United States lags behind?

Not all regulators are cooperating with the rapid growth of cryptocurrencies, according to Brad Garlinghouse, CEO of blockchain company Ripple.

The US Securities and Exchange Commission has sued Ripple, Garlinghouse and co-founder Chris Larsen over allegations that they illegally sold more than $1 billion in XRP cryptocurrency.

The Securities and Exchange Commission maintains that XRP should be considered security, a claim that Ripple disputes.

“When I give advice to entrepreneurs who are considering building a crypto or blockchain company, I tell them not to integrate in the US,” Garlinghouse said. “Lack of clarity and lack of certainty means that you are at risk of the specific type of lawsuit that the SEC has brought against us.”

Ripple is even considering moving its headquarters abroad, with London and Singapore among the potential candidates.

“Ripple will employ 300 people in the North this year, more than half of whom will be outside the United States,” Garlinghouse said.

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