The head of the Binance cryptocurrency exchange, having studied the global interaction of crypto markets, believes that geopolitical conflicts and the forced separation of markets lead to a decrease in liquidity.
Changpeng Zhao, after recent negotiations with the governments of different countries, expressed concern that the authorities of world powers want to separate the crypto markets by state. According to him, such segregation will bring problems to the crypto market:
“This is a bad idea for a number of reasons. Greater liquidity is one of the best consumer protection mechanisms. It protects against market volatility manipulation and reduces the number of liquidations by investors.”
Zhao says that Binance’s experience in the markets of 180 countries has shown that the division by country “makes it much easier for traders to fluctuate markets,” which will lead to increased volatility in the cryptocurrency market. The head of Binance stated that arbitrage traders, who “traditionally balance cryptocurrency prices across different exchanges or order books, are not as effective at stabilizing prices when there is one common book”:
“Greater liquidity offers better prices for users. Tighter spread. Low slip. This is a very important form of consumer protection. The lack of a lot of liquidity can result in real financial consequences for users.”
The head of Binance added that investors on the exchange do not choose a counterparty. They simply “trade the order book like a broker”.
In July, as part of the Blockchain Economy Istanbul conference, the Minister of Treasury and Finance of Turkey, together with Zhao, discussed the strategy for developing the industry in the country. Binance launched its first customer service center in Turkey in April 2022, two years after starting operations in the country. In 2021, the head of the exchange met with the Prime Minister of France to discuss the development of Web3 and blockchain technologies. At that time, Binance allocated $116 million for this initiative. In May 2022, Binance received regulatory approval for the operation of the exchange in France.
Source: Bits
I’m James Harper, a highly experienced and accomplished news writer for World Stock Market. I have been writing in the Politics section of the website for over five years, providing readers with up-to-date and insightful information about current events in politics. My work is widely read and respected by many industry professionals as well as laymen.
