Changpeng Zhao (CZ), Binance CEO, believes in the need to maintain large liquidity in cryptocurrency markets. He has been involved in policy discussions with various governments across the world.
This comes as a number of countries called for segregated markets and order books in their jurisdiction. CZ tweeted that large liquidity is one of the best Consumer Protection mechanisms as it protects against market manipulation, and volatility and reduces liquidations. He outlined that if the liquidity of 180 countries was divided, it would make it 180x easier for large traders to swing the markets, increasing volatility significantly. CZ says there would be arbitrage traders trying to bring the prices to balance. However, they are not nearly as efficient as one order book. They make money in between which is paid by consumers.
CZ said that another misunderstanding that people have is that users don’t choose a counterparty, they trade with the order book which can be taken as a broker. He pointed out that large liquidity offers better prices for users – tighter spread and lower slippage. It’s an important form of Consumer Protection and has a real financial impact on users.
Binance wants to develop cryptocurrency infrastructure and education, and as such is working with a number of countries around the world. In May 2022, the crypto exchange signed an agreement with Kazakhstan to assist in developing legislative guidelines and regulatory policies for cryptocurrencies in the country. CZ also had a virtual meeting with the Turkish Minister of Treasury and Finance in July 2022. Binance introduced its first customer service center in Turkey in April 2022. It first started operations in the country in 2020. CZ has also met with the French president Emmanuel Macron for discussions around driving the development of Web3 and blockchain technology in France.