Changpeng Zhao, the chief executive of top crypto exchange Binance, says dividing up crypto markets by country will likely spell volatility for digital assets.
Zhao suggests countries asking for “segregated order books,” meaning separate liquidity within their borders, risk boosting the volatility of crypto markets.
“Large liquidity is one of the best consumer protection mechanisms. It protects against market manipulation, volatility, and reduces liquidations.
Imagine if we divided the liquidity by 180 countries. It will make it 180x easier for large traders to swing the markets, and significantly increase the volatility.
There will be arbitrage traders trying to bring the prices to balance, but they are not nearly as efficient as one orderbook. And they make money in between (which is paid by the consumers).”
The CEO also notes that large liquidity provides better prices, tighter spread and lower slippage for customers.
“Another misunderstanding people sometimes have: on an exchange, users don’t choose a counterparty. They just trade with the order book. You can think of the order book as a broker.”
Binance is registered in the Cayman Islands but currently doesn’t have an official headquarters. Zhao told Fortune earlier this year that the exchange was looking to establish an actual headquarters “very soon.”
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/pixelparticle/WhiteBarbie
The post Binance CEO Changpeng Zhao Says Dividing Crypto Markets Up by Country Is a Bad Idea appeared first on The Daily Hodl.
