00:00Today on Yahoo Finance Future Focus, we are joined by Vishal Sachindran, Binance's Head
00:10of Regional Markets, to discuss recent cryptocurrency market volatility and regulatory and compliance
00:16developments.
00:17Vishal, welcome to the show.
00:19Thanks so much, Brian.
00:20It's a pleasure to be here.
00:21Is Binance concerned about the current cryptocurrency market volatility?
00:24I don't think the current downturn is indicative of a long-term negative trend.
00:29If you look at what's happening across in the U.S., the geopolitical factors there,
00:34the elections coming up, and if you then look about, see what's happening in the Middle
00:39East as well.
00:43So all these influence the way the markets have reacted.
00:48But again, like I said, I don't think there should be any long-term impact to be honest.
00:55Yeah, you hinted on sort of like the U.S. elections.
00:58So are there any other catalysts on the horizon that could spur a sustained bull run in crypto?
01:03You have the large scale institutional investors coming into the crypto market as well now.
01:08You have the ETFs that have been accrued across different markets.
01:14So the volatility would now also depend on how traditional institutional investors now
01:19see this asset class as well.
01:24If they decide that they're going to get out of the market, it's going to have a huge impact
01:28on the crypto side as well.
01:30But at the same time, when you have the macroeconomic factors like you just mentioned, everyone's
01:36expecting the Fed rate cuts to happen in September.
01:41And we would then see that as another catalyst to kind of rebound the market and bring it
01:47back.
01:48And we'll see how that goes as well.
01:49So I really think there are those kind of factors that would affect, which would normally
01:55not have an impact on the crypto markets.
01:57But now there's a lot more synchronicity between the traditional financial markets
02:00and the crypto side of the world as well.
02:02There's a lot of recessionary signals out there.
02:04There's a lot of fear that world markets could plunge into a recession.
02:08Now, how would Binance prepare if there was a potentially prolonged recessionary environment?
02:15We are a seven year old company now, and I think through our seven years, we've experienced
02:20quite a few bull and bear cycles with the substantial extended periods of volatility.
02:27Our business model has proven quite resilient to date.
02:31And as crypto use cases continue to develop, we will see greater adoption than before.
02:38And we expect to see the demand for crypto exchanges be even higher than it was before.
02:44Would you say that the demographics that use crypto at the moment are quite narrow?
02:48Like, how do you make it more inclusive?
02:50How do you include possibly people that aren't as tech savvy?
02:54Education.
02:55Education is extremely important.
02:57I think one of the main things that we have been focused on over the last year or so more
03:05has been how we focus on three main things.
03:08One is, like I mentioned before, our users that are the key, most important people for us.
03:13Second is our regulators.
03:15And the third is our partners that we work with.
03:18Now, if you want to grow the pool of people that actually use crypto and want to learn
03:24about crypto, you have to hit them through all these three different points, right?
03:28You have to, there has to be a stronger center of education.
03:31And I think our Binance Academy teams have been working very closely with universities
03:35across the region.
03:37We are working very closely with law enforcement across the region on training law enforcement
03:42agencies on how to catch bad actors who use crypto for the wrong things.
03:47Those are the kind of things we hope that will grow that user pool.
03:51And regulations give users the protection and the clarity that, hey, we're not doing
03:57something crazy by investing in some policy scheme, but we're doing something that is
04:01highly regulated.
04:02And this is an industry that has a new asset class for us to invest and work our way towards
04:07financial freedom.
04:08When we look at the markets in crypto assets, regulatory framework that the EU have just
04:15brought in.
04:16Now, I suppose it's coming in stages.
04:18I think it's fully implemented or fully goes into action this December.
04:22What do you think are the positive elements from what the EU have done here that UK regulators
04:27could take and possibly emulate?
04:29And also, what are the pitfalls that UK regulators could possibly circumvent and avoid?
04:36As an ex-regulator, I think we were, I was part of a team that was one of the first in
04:41the world to roll out crypto regulations globally.
04:45And I've been then since dealing with regulators across the world who had different stages
04:50of rolling out regulations.
04:52Mika is a one regulation that actually oversees an entire region, which is phenomenal.
05:01It's amazing to reach this point, right?
05:04And if you see us as Binance, our top priority in Europe is compliance and preparation for
05:09the implementation of Mika towards the end of the year.
05:13We're exploring the best options for ensuring that we are able to continue to offer products
05:17and services in the EU.
05:18We're making our necessary changes to the way that part of the structure and the corporate
05:22governance in the EU.
05:24And we'll provide updates on how we are working with Mika and within the EU regulations as
05:31an appropriate.
05:32I don't think it's, there's ever going to be a perfect regulation, but regulation should
05:36always be having the users at its focus and driving innovation as opposed to stifling
05:44innovation.
05:45It should be fostering it as opposed to stifling it.
05:47So in that respect, I think the EU has got that.
05:51Hopefully they listen to the users and that's something the UK should learn as well.
05:55Yeah, the only specific things that the UK regulators could look at and say, okay, we
06:00could be a little bit more agile here, or we don't need to be as prescriptive as Mika
06:06for this area.
06:07There are a few, right?
06:10You have to see how some of the things shouldn't be as prescriptive when it comes to some things
06:15like stablecoin issues or universal station, or even how they look at different parts of
06:22trying to figure out which business model companies should be using to set up shop in
06:28the EU.
06:29I think that should be decided by the business on how they would seem it best fit and continue
06:36having those competitions.
06:37Well, it's important that before you roll out these frameworks, you continue having
06:41competitions with the players in the market who service their markets and see what works
06:44best and what is the risk capital from a regulatory perspective and what mitigants they're willing
06:49to put in place to address those risks and those are the key things.
06:54Vishal Sachindran from Binance.
06:57Thank you very much for coming on this week's episode of Yahoo Finance Future Focus.
07:00Thanks so much, Brian.
07:01It's a pleasure.
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