CZ says Binance wants to act in ‘full compliance’ with Brazilian laws

The CEO and founder of the most used cryptocurrency exchange to trade Bitcoin in Brazil, Binance, was in the country last week to participate in the Ethereum.Rio event. Changpeng Zhao, better known as CZ, took the opportunity to meet with national leaders, including the Central Bank’s regulatory director, Otávio Damaso; the mayor of Rio, Eduardo Paes; and the governor of São Paulo, João Dória. During his visit to Brazil, Binance’s CEO left a clear message: the company intends to comply with Brazilian legislation. The statement is important because the exchange is heavily criticized by local competitors for not having a registered financial institution in the country.

Binance will follow Brazilian legislation

As mentioned, Binance dominates BTC trading in Brazil. In February, for example, the platform accounted for 38.16% of cryptocurrency transactions, according to Cointrader Monitor. Globally, Binance concentrates almost 70% of cryptocurrency transactions. In addition, it had revenues of US$ 14.6 billion in tariffs in 2021. Although it defines itself as global, the company was forced by regulators to open offices in some countries to be allowed to operate. In Brazil, the exchange intends to do the same, and the most likely city to host Binance’s office is São Paulo. “Brazil is very important to us and we are at a turning point, from an unregulated to a regulated market. It is important to have face-to-face meetings to generate trust”, said CZ in an exclusive interview with O GLOBO. The Binance founder also highlighted that Binance has signed a memorandum of understanding to acquire the Sim;Paul exchange. As highlighted by CZ, this acquisition is a way for the company to “inherit” the operating license of the financial institution: “We want to act in full compliance with the regulation, to make the market grow in a healthy way”, he emphasized.

Cryptocurrency regulation in Brazil

The regulation of the crypto market has been advancing in Brazil and this is seen with good eyes by CZ. This is because society, according to him, is not sufficiently evolved to live in an environment without rules. But CZ noted that it’s not just exchanges that need regulation, the DeFi market and many others also need guidelines. “There’s a lot more to regulate: how do we decide which currencies to support, how do we deal with the security of wallets, what are our internal policies for employees? We want to show regulators around the world our best practices, in order to teach, to a certain extent, how to regulate this market.” Still talking about the expansion to Brazil, the executive said that the initial idea is not to increase revenue. Instead, the company wants to expand its user base: “This is not the time to maximize revenue per user. About 3% of the general population uses cryptocurrencies. In Brazil, it’s similar. We need to get to 90%. This is the goal. In fact, we want to reduce our fees. We already have a sustainable business model, we are profitable,” he concluded.

Crypto money laundering

As far as crypto-money laundering is concerned, Zhao played down the use. Furthermore, he pointed out that there is more money laundering in the traditional economy than in crypto: “The latest report by Chainalysis says that in 2021, of all crypto transactions, only 0.05% were associated with illicit addresses. According to UN data, about 2% to 5% of the world’s GDP is associated with illicit activities. In other words, there is a lot more illegal activity going on in the regulated real economy than in crypto.” As CZ noted, blockchain technology is very traceable and very transparent. Hence, it is difficult to launder money with digital assets.

Bitcoin as a store of value

Finally, CZ was asked about Bitcoin’s role as a store of value, particularly in the current context of the Russian-Ukrainian war. In response, the programmer noted that he believes cryptocurrencies are a safe haven especially during times of geopolitical instability, war and inflation: “I think this Ukraine war is already teaching the world that what we traditionally call money, fiat money, can collapse. The Russian ruble has already lost 90% of its value and is not a secure reserve. Coins called stable are not stable. So truly strong money is one that is in limited supply, like Bitcoin and the rest.” Read also: Check out 5 cryptocurrencies to make money with staking Read also: Honduras may officially recognize Bitcoin as legal tender in the next few days Read also: Brazilian UFC fighter is first Latin American athlete to receive salary in Bitcoin