It’s tough to find a middle-ground when discussing cryptocurrency. As Binance CCO Patrick Hillmann noted at a fireside chat in September, “one of the biggest challenges we have is that a lot of the conversation around crypto [falls into two categories].”
On one hand, there’s the idea that the entire industry is a Ponzi scheme, which will disappear in a year’s time. On the other, there’s the belief that crypto will change the world and our fundamental behaviours.
“The reality is it’s not going to be either of those things,” says Hillmann. “At some point, this is going to be an underlying technology which changes the way functions interact with each other.”
It’s not as attractive a statement, but in Hillmann’s view, a more realistic take. Blockchain technology spans various business verticals, and its impact on these fields could vary significantly. Social media could forever be changed by the advent of the metaverse, in a way which is very visible to the end users.
In the finance industry, the effects could be more subtle. Companies like Ripple are integrating blockchain-based payment solutions in partnership with TradFi institutions. In this case, customers enjoy lower transaction fees thanks to blockchain technology, without even being aware of it.
Will blockchain have the same impact as the internet?
“Today, you don’t think about the internet,” says Richard Teng, Regional Head at Binance. “It’s a part of life and has transformed various business models — entertainment, financial services, e-commerce.”
To explain the current state of crypto, Teng refers to a conversation between Bill Gates and talkshow host David Letterman from 1995. In this conversation, Gates attempts to explain what the Internet is, and why it’ll be “the next big thing”.
Letterman is skeptical, questioning why someone would listen to a sports game commentary on the internet when they could use a radio instead; or why they would look for information online when they could get it from a magazine.
People tend to overestimate technology when the time horizon is very short and underestimate technology when the time horizon is very long.
– Richard Teng, Regional Head at Binance
Teng believes that in the long-term, blockchain technology is going to transform different industries, especially in the Web3 space. “People look at crypto right now, and it’s one of the most important use-cases, but it’s not the only blockchain use-case.”
“[Blockchain technology] is going to transform how value is being transmitted,” says Teng. It’s a comparison to how the internet transformed the way information was being transmitted.
“Look at the current state of financial services. There are still a lot of frictions that we see. For instance, if you make a payment today, the merchants won’t get their money until many days later. If you do an international transfer, it’s very costly. These things will be totally transformed by blockchain.”
How Binance is shaping the future of blockchain
Although it’s best known for its crypto trading platform, Binance offers a lot more than that. The company is the biggest blockchain and crypto infrastructure provider in the world. It offers services across different business verticals.
Binance Pay looks into payment solutions, Binance Labs invests and empowers blockchain startups, while Binance Charity explores the use of blockchain in philanthropy — and those are just a few examples.
We’re one of, if not the largest investors in the blockchain ecosystem, with more than 200 projects under our belts. We continue to support crypto adoption globally and we’re working closely with policymakers and government agencies in reimagining the future of the Web3 space.
– Richard Teng, Regional Head at Binance
Building on this point, Hillmann speaks about what Binance looks for when investing in other projects. “We’re not looking to buy the next big hot thing in the industry,” he says. “We’re trying to identify those trends and projects which are eventually going to create real impact on people’s daily lives.”
“The reality is we don’t have that yet,” Hillmann continues. Going back to the comparisons between blockchain and the internet, he says, “It’s not even 1999.”
Hillmann believes that blockchain could still be a long way from the stage the Internet was during the dot-com bubble. “There are still going to be a lot of bear markets, and there may even be a much worse bear market than we’re going through now. That’s part of a healthy process.”
With each of these market cycles, the crypto industry is primed to grow and evolve. Through initiatives like Binance Labs, Binance aims to support blockchain innovation and keep pushing the industry in the right direction.
The regulatory elephant in the room
Innovation and regulation often go hand-in-hand, and it’s tough to speak about one without covering the other. Over the years, Binance has had its fair share of run-ins with regulators.
In December 2021, the company withdrew its application to be licensed in Singapore. In July 2022, it was fined €3 million by the Dutch Central Bank for offering crypto services without registration.
“We are very committed to working with global regulators. We are the most regulated platform globally,” says Teng, mentioning countries including France, Spain, USA, Canada, Dubai, and Australia.
Beyond the requirements of regulators, the company goes above and beyond to ensure ethical and secure operations. “We have strict rules internally and people are let go for breaching those. Our internal practices are above those imposed by regulators.”
Although Binance is often in the spotlight for its regulatory challenges, Teng explains that this isn’t a problem unique to the company.
“As the largest player, regulators start focusing on us before making their way through the list. That doesn’t mean that it’s [only] our problem. It’s the entire crypto industry.”
Featured Image Credit: Binance
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