Rethinking the Role of Geography in the Cryptocurrency Industry

02/20/2023 08:16 • Metaverse & Beyond • 131 views

On February 20, Zhao Changpeng, founder of Coin An, tweeted: “The term ‘offshore’ appears too narrow, self-centered, and takes the overall situation into consideration, which is not conducive to the development of our industry. From the perspective of ‘onshore’, FTX.US is a ‘onshore’ exchange (starting from the United States) 。 The chief executives of SBF and FTX are Americans. They spent a lot of time and energy lobbying in the United States. This did not prevent fraud. The distinction between “onshore” and other people is self-centered and a bit arrogant.

Zhao Changpeng: Blockchain has no national boundaries and does not use the “offshore” and “onshore” thinking to discuss issues

Interpretation of the news:

In the world of cryptocurrency, geography has been a contentious and decisive factor in the success and regulation of various exchanges. The term ‘offshore’ has been widely used to describe exchanges that operate outside of traditional financial centers and government regulation. However, according to Zhao Changpeng, the founder of Coin An, this term is too narrow, self-centered, and not conducive to the overall development of the industry. Instead, he suggests that we should look at the industry from the perspective of ‘onshore’ exchanges, which are intricately linked to local markets and regulations.

Changpeng uses the example of FTX.US, an exchange that started in the United States and is operated by American chief executives. He argues that despite spending a lot of time and energy lobbying the United States government, the exchange has not been immune to fraudulent activities. This leads Changpeng to question the self-centeredness and arrogance of those who differentiate themselves as ‘onshore’ from other players in the industry.

This message sheds light on the ongoing debate about how governments should regulate the cryptocurrency industry. Some governments, such as China, have taken a hard stance and outright banned the technology. Others, like the United States, have taken a more nuanced approach by developing regulatory frameworks that bring the industry within their jurisdiction. The emergence of ‘onshore’ exchanges that are subject to local regulations only amplifies the need for clear and consistent regulatory standards globally. This is a challenge as each country has its own regulatory landscape, and the decentralized nature of cryptocurrency makes it difficult to create consensus.

Changpeng’s message suggests that the cryptocurrency industry needs to embrace a more inclusive and collaborative approach. It is not helpful to create distinctions based on geography or regulation. Rather, we need to work towards building a more resilient and secure ecosystem that is not limited by borders. This means recognizing the value of collaboration and partnerships that span across jurisdictions.

In conclusion, the cryptocurrency industry is at a crossroads when it comes to regulation and governance. While the concept of ‘offshore’ exchanges has been prevalent, Changpeng’s message highlights the importance of focusing on ‘onshore’ exchanges that are closely linked to local markets and regulations. This shift in perspective is a timely reminder that we need to rethink the role of geography in shaping the industry’s future.

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