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Changpeng Zhao, the Binance CEO, feels that lack of understanding about cryptocurrencies is leading to a huge loss for India. Recently ICICI banks and other major banks have stopped the payment gateway services to crypto platforms in India.
- The regulators’ decision of not backing cryptocurrencies is making India potentially losing the multi-billion dollar companies from India
- The regulators who are resisting the use of cryptocurrencies may want to protect their legacy institutions
Binance CEO Changpeng Zhao, while speaking to ET, said that lack of understanding of cryptocurrency is leading to loss of money for India. Banks that are not keen to work with crypto are like bookstores refusing to work with the internet. He tweeted his sentiments on May 7 when the ICICI bank and other major banks from India are cutting off the banking and payment gateway services to crypto platforms in India.
Zhao believes that there is a lack of understanding among Indian regulators about cryptocurrencies. The regulators’ decision of not backing cryptocurrencies is making India potentially losing the multi-billion dollar companies from India.
While speaking to the Indian journalist from ET over call, he feels that the banks cutting off the payment gateway for cryptos is mainly due to the fear or lack of understanding of cryptocurrencies. He informed that some countries are ready to experiment and are moving towards innovation in the industry, and others are resisting.
Regulatory restrictions
The regulators who are resisting the use of cryptocurrencies may want to protect their legacy institutions. This might happen for a short period, but they will be destroyed in the long term. This can only happen because of technological innovations in industries like decentralized finance.
He has a fear for the countries for those who are resisting innovation. He believes that if access to new technology is cut, there will be slow development of that technology in that region. Currently, more than 50% of the innovation in decentralized finance is coming from the US. This is because the US has accepted cryptocurrencies with a positive outlook and open arms. They have developed very positive and clear regulations for cryptocurrencies.
In India, the number of engineers is more compared to the US, but there is not much innovation seen in India. In 2019, Binance had acquired the Indian cryptocurrency firm WazirX. The company was acquired with a vision to expand its business within India.
But, Zhao says that they only have limited powers. They can only help the company in a limited way. To get them banking access is not possible. The only way we can help is to increase the understanding of cryptocurrencies among regulators and regular people.
However, Zhao did not get a chance to discuss the issues with the Indian regulators. India is missing out on $50-$100billion listed companies because of its restrictive nature. On the contrary, the US will witness the flow of more than at least ten companies valued at $100billion plus in the next five to ten years.
He further concludes that it would be like missing Facebook, Google types of organizations that could have added value to the economic structure. It will also have an effect on other industries that depend on financial services and make these industries dependent on global service providers instead.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
