According to the CEO of Binance, Several governments have asked the exchange businesses that allow customers to trade cryptocurrencies for fiat money or other cryptocurrencies. to separate trade listings by country. However, Zhao ruled out this possibility and claims that a unified liquidity is much more beneficial for the market and for traders.
- Several countries have asked Binance split the trade listings by country
- Zhao proposes that this is a bad idea. There would be an opportunity to manipulate the market
- High liquidity protects investors in general
According to the CEO of Binance, If exchanges were to have segregated trade listings by country, this would trigger a lot of volatility among the major cryptocurrencies.
Segregating liquidity by country is a bad idea
This was stated by Changpeng Zhao (CZ) in a series of messages published through his Twitter account, in which he presented a reflection on the issue because of the requests made by several countries, and made visible some of the problems that could bring to do things that way.
“From our interactions, some countries want a segregated order listing the addition of an asset or an asset pair to an exchange. (liquidity). This is a BAD IDEA for several reasons. High liquidity how easily a cryptocurrency can be bought and sold without impacting the overall market price. is one of the best Consumer Protection mechanisms. It protects against market an area or arena, online or offline, in which commercial dealings are conducted. manipulation, volatility a statistical measure of dispersion of returns, measured by using the standard deviation or variance between returns from that same security or market index. and reduces liquidations.”
From our interactions, some countries want a segregated orderbook (liquidity). This is a BAD IDEA for a number of reasons.
Large liquidity is one of the best Consumer Protection mechanisms. It protects against market manipulation, volatility, and reduces liquidations.
– CZ changpeng Zhao (CZ) is the founder of crypto exchange Binance. ???? Binance (@cz_binance) July 31, 2022
According to Zhao, several governments have requested this possibility, which coincides with the regulatory interest expressed by several nations over the last year. However, the CEO of Binance stresses that this idea could be very harmful and gives the following example:
“Imagine if we divided the liquidity among 180 countries. It will make it 180 times easier for large traders to change change — a concept relevant to cryptocurrencies that use the UTXO model — is the number of coins sent back to a user after they use their unspent outputs to initiate a transaction. markets and significantly increase volatility.”
The advantages of high liquidity
As for the method currently used for trading operations, Zhao pointed out that this provides real guarantees to avoid market manipulation, and that there are still certain myths that need to be cleared up, for example about the nature of large trade order lists.
Sobre esto último, Zhao indicó:
“Another misunderstanding people sometimes have: on an exchange, users don’t choose a counterparty. They only trade with the order list. You can think of it… as a broker.”
In terms of liquidity, the CEO of Binance proposes the following:
“High liquidity also offers better prices for users. Tighter spreads. Lower slippage. This is also a very important form of Consumer Protection. Real financial impact for users.
Large liquidity also offers better prices for users. Tighter spread. Lower slippage. This is also a very important form of Consumer Protection. Real financial impact for users. #Binance has the largest liquidity by far, globally. The best user protection mechanism.
– CZ ???? Binance (@cz_binance) July 31, 2022
Special time for the critpo market
Zhao’s comments come amid what many analysts are calling the crypto winter, a period where the price of major cryptocurrencies has fallen sharply from the all-time highs seen late last year.
This fall and the associated consequences have led many governments to call for greater regulatory emphasis on cryptocurrencies in general, especially after the events that shook Terra’s ecosystem and led to its imminent collapse, leaving in its wake large numbers of those affected who lost most of their capital capital is most commonly defined as the large sum of money you would use to invest. invested in LUNA y UST.
Previously, the Binance CEO participated in an interview in which he spoke about the current macroeconomic conditions and how this scenario is driving more and more people to Bitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. and the major digital digital technologies are these electronic tools that have the ability to generate, store or even process data. currencies, an idea about which he said the following:
“The macroeconomic situation, there’s going to be high inflation, there’s talk of recession and so on. All these things are driving the adoption of Bitcoin … and other cryptocurrencies”.
- “Inflation and recession fears will drive more people to adopt Bitcoin,” says Binance CEO
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Source: Twitter, Daily Mail
Version by Angel Di Matteo / DiarioBitcoin
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