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Summary of key points of CZ AMA: Regulation is tightening; NFT technology possibilities only show the tip of the iceberg

23-02-16 18:03

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Highlights From CZ's Valentine's Day AMA

Source: Binance

Frank, Foresight News

Key points:

Binance 首席执行官赵长鹏（CZ）于 2023 年 2 月 14 日在 Twitter Space 上花了一个小时回答用户的问题，大部分讨论都集中在稳定币和 BUSD 上；

BUSD 不是由 Binance 发行的，它带有 Binance 的品牌，但不是由 Binance 创建或运营。 Binance 是一个旨在帮助人们访问各种数字资产（包括稳定币）的平台，也将继续与多家稳定币发行商合作；

Although the minting of new BUSD tokens has stopped, the existing supply of BUSDs in circulation is secure. If you look at the notice from the New York Department of Financial Services (NYDFS), you will see that they specifically directed Paxos to ensure that BUSDs maintain 1:1 hooks and the ability of customers to redeem orderly;

Regulation is tightening. In the long run, this will limit the adoption of crypto by traditional financial services providers, making them less competitive, yet the crypto industry is extremely resilient;

Different jurisdictions have different regulatory regimes for blockchain, Web3, and encryption, such as Dubai, Bahrain, and France are generally positive at the moment;

Notes from CZ:Here is a summary of the questions I answered during the February 14, 2023 Twitter AMA on BUSD, BUSD alternatives, Circle, and more. Please note that this is not an accurate transcription, and I have removed much of the stuttering and rephrased it to make it clearer (and added some missing points).

About BUSDs, and alternatives to fiat backed stablecoins

Q: In light of the latest developments in BUSD and the failed Luna/UST debacle, do you see any alternatives to fiat backed stablecoins? Also, why are we still running on this dollar system? As a new industry, we should have hard assets behind us. For example, why don't we switch to gold-backed stablecoins? Do you see a problem with that?

CZ:There are a lot of topics here. First of all, most people's transaction costs are still calculated in fiat currencies, for example, people calculate cryptocurrency prices in dollars, so we still need fiat based stablecoins.

But given the pressure on dollar-based stablecoins, I think the crypto industry is likely to move more toward non-dollar stablecoins, including the euro, the yen, and possibly even yuan-based stablecoins, and we're seeing a number of those options on the table right now.

Algo stablecoins may also rise again, but algo stablecoins have different risk characteristics, and there will always be a risk of decoupling when users use one asset as collateral for another, and we need to make sure that these risks are clearly presented to users.

One problem with UST was opacity, no one knew what Do Kwon or his team was doing when UST collapsed, and Do Kwon was too slow to use bitcoin reserves to restore the UST peg.

If the algorithm for restoring hooks is coded in a smart contract in a transparent way (such as DeFi/Uniswap), people will at least know the risks involved and this may be a better approach, but it needs to be developed further.

As for anchored currencies based on gold or physical assets, that's another topic entirely, and I believe these haven't taken off yet, mainly because it's almost impossible to verify that asset backing for gold actually exists, and their pricing is difficult to calculate. So, I don't think these are realistic options for stablecoin yet.

There are many potential solutions to the problems we face, and many projects working on those solutions have contacted us over the past few days. Overall, the crypto industry will eventually find a solution and continue to evolve.

About whether BUSDs are still safe

Question: Thank you for being here on Valentine's Day. My question is is BUSD still safe?

CZ:First of all, happy Valentine's Day everyone!

Second, for BUSDs, if you look at the notice posted on the New York Department of Financial Services (NYDFS) website, they specifically instruct Paxos to ensure that BusDs maintain 1:1 hook-ups and the ability of customers to redeem in an orderly way.

Therefore, even if the minting of new BUSDs is stopped, the existing circulating supply of BUSDs is safe.

No user should lose anything.

On BUSD and overall market sentiment

Question: In general, what is your general view of BUSD's current situation? What impact do you think this will have on the market?

CZ:In general, regulation is getting stricter. We've seen multiple banks pull the plug on crypto support -- Coinbase was fined $100 million not long ago, then Kraken was fined $30 million for its Earn scheme, and now it's BUSD's turn.

In the short term, the cryptocurrency industry will be negatively affected to some extent as we lose access to fiat currencies, reduced product offerings, etc., but the cryptocurrency industry is extremely resilient and we have seen the crypto market repair following the FTX bankruptcy.

However, in the long run, increasing regulation will really limit the pace at which traditional financial service providers can adopt crypto technology, resulting in their blockchain adoption likely to be delayed by at least three to five years, which will make them less competitive in this new field in the future.

About NFT

Question: I would like to hear your opinion on NFT and whether you actually own any?

CZ:Well, the short answer is: No, I don't own any NFT.

I'm not an art collector, and I don't really listen to music. My background is as a programmer and I run a company, which you probably already know if you've read my blog.

I've gotten some NFTS, but I can't actually remember the address of the wallet I used to receive them.

I think NFT technology is really great, but we're still just scratching the surface of what this technology can do.

关于稳定币和 Binance 的作用

Q: How do you see the development of stablecoin market in the future Binance What role does it play in this field? Second, how do you respond to criticism that Stablecoins are just another form of legal tender that undermines the decentralized character or spirit of the crypto space?

CZ:这里首先要说的是，BUSD 不是由 Binance 发行的。

它带有 Binance 的品牌——正如我们同意的那样。但这不是我们创造的东西，这个想法不是我们创造的，它是由 Paxos 提出的，因此我们将自己（ Binance ）视为促进者。

Binance 是一个旨在帮助其他人访问加密货币（包括稳定币）的平台，我们提供流动性，我们也始终使用多种稳定币。就像现在我们支持 USDT、USDC、TUSD 和其他一些稳定币，我们也将继续与多个稳定币发行商或创建者合作。

As for the second part, I think stablecoins offer a lot of value in the crypto industry, and they're definitely good for cryptocurrencies. Stablecoins are kind of like a hybrid between the native cryptocurrencies (like bitcoin) and the traditional fiat currency world, which is quite difficult, slow, and expensive if you want to use a bank to transfer money across borders, but much faster and cheaper when you use stablecoins that run on a blockchain.

Without Stablecoins, you might see cryptocurrency prices vary from country to country and from exchange to exchange.

关于 Circle 与 Binance 、BUSD 的相关报道

Question: My question is about the Bloomberg article that says Circle complained to regulators about your management of BusDs, which you think is correct Binance The attack? What is your opinion on this?

CZ:Well, a few people sent me that article, and I really don't believe it's true.

I think any professional industry player knows that hurting one industry player hurts everyone else. As BUSD gets hurt, USDC also faces a lot of redemptions and market value loss, so I think Circle is much smarter.

Plus, we know the media likes to put A and B on opposite sides, and then it's "3, 2, 1, hit!" . We can't blame them, their job is to sell stories, but we need to take media articles with a grain of salt, so I won't read too deeply into them.

Binance 一直在与多个稳定币合作伙伴合作，并将继续这样做，努力帮助建立一个开放的全球生态系统。

About the SEC's review of cryptocurrencies

The question: The SEC has essentially declared open hunting season for crypto projects -- or so I thought. What advice do you have for other cryptocurrency founders on how to survive? Moving to Dubai is one suggestion. Do you have any other advice for founders?

CZ:Well, I wouldn't describe it that way. I don't think the SEC says "hunting season" publicly anywhere, which is probably how others interpret things.

But there will definitely be more regulatory scrutiny, and they will pay more attention to cryptocurrencies. As you say, different jurisdictions now have different regulatory regimes for blockchain, Web3, and cryptocurrencies.

For example, Dubai, Bahrain, and France are all positive on cryptocurrencies, and there are many other regions that are also very friendly. So one option is to explore multiple places, and if you're serious about your project, moving to a new country might not be such a bad thing.

People often move to different neighborhoods within a city or to different cities within a country, but sometimes they are very afraid to move to a new country. I don't know why this is. We all live on a little rock called the Earth.

I'm not an expert or a lawyer, but I'm sure you want professional advice. Basically, consult a lawyer who knows your product and makes sure it doesn't cross any regulatory red lines, but there is a fair amount of uncertainty and a lack of clarity.

One thing you can do is reach out to regulators, some of which are more approachable than others. So depending on luck, and who you are or who you know, at least most regulators claim they welcome people to come and talk to them.

Another way you can think about it is to look at how others are doing it now, a bit towards following the "industry norm" as much as possible, that is, the herd mentality.

Overall, there are some pretty favorable jurisdictions for the rapidly growing crypto industry.