The crypto industry is optimistic about 2023. After taking a significant financial hit in 2022, the cryptocurrency sector is looking to take off in 2023 and beyond as new regulations are introduced to improve its security.
BMG had the opportunity to discuss the market trends with Binance General Manager for Central and Eastern Europe (CEE) Kyrylo Khomyakov. What follows is an exclusive interview.
How do you assess the legal regulation of the cryptocurrency market and ensuring the security of cryptopayments?
Legal regulation of the cryptocurrency market is a complex and important area that requires knowledge of the world's best practices and a professional understanding of the cryptocurrency market and blockchain technology itself.
To introduce innovation and maintain the country's competitiveness in the global market, a clear regulatory framework is needed. It provides the predictable environment needed for both users and businesses to thrive.
I would especially like to note here the EU’s approach to adopting MiCa. The new law introduces a regulatory framework proposed by the European Union (EU) to regulate cryptoasset service providers. MiCA aims to establish a single set of rules and regulations for all EU member states.
This streamlined approach replaces the previous fragmented and costly oversight process, offering a more accessible environment for Web3 business development.
Through MiCA, the EU is creating a clear regulatory framework for companies in the European Union. The lack of clear regulation of the cryptocurrency industry slows down its development and prevents the mass introduction of digital assets. And thanks to the new law, companies will clearly understand their tasks and will be able to provide protection for crypto investors.
The new law aims to achieve critical goals such as protecting consumer rights, improving market efficiency and leveraging blockchain innovation. Thanks to a single system, companies operating in several EU countries will find it easier to comply with legislation by adhering to a single set of rules. It will also ensure a level playing field for all crypto companies operating in the EU, regardless of country of origin.
MiCA provides a clear and comprehensive regulatory framework for companies operating in the EU, something businesses have needed for a long time. The new law will help ensure effective consumer protection and provide support to cryptoasset service providers.
What are the security requirements for crypto payments? What innovations are expected in this direction?
Ensuring the security of crypto payments is based on four key elements: high-quality authentication and access control, encryption, the use of threat detection and response protocols, and privacy.
During the implementation of security measures, users need to confirm their identity and limit access to the system. Data encryption, especially confidential information, also plays an important role. Service provider platforms must be equipped with mechanisms to detect and prevent threats. In addition, ensuring the privacy of transactions is a key aspect, subject to compliance with relevant regulatory standards.
In the area of innovation in the field of cryptopayment security, attention is paid to the development of blockchain and artificial intelligence technologies, strengthening of legislative and regulatory structures, increasing transparency and accountability of platforms, as well as the development of convenient and secure authentication and access control methods.
It is important to always remember that the security of crypto payments is a dynamic process that requires constant development and improvement.
What steps are being taken to combat illegal crypto transactions (money laundering, sponsoring terrorism, etc.)?
Speaking of Binance, the fight against illegal activities is one of our priorities and we attach great importance to combating illegal crypto transactions. Binance uses sophisticated transaction tracking systems that automatically analyze every transaction to look for suspicious activity. Thanks to this, Binance can quickly detect attempts at money laundering or other illegal transactions.
All clients must undergo the KYC (Know Your Customer) procedure to confirm the identity of each user. This helps reduce the possibility of fraud and other illegal activities.
We also cooperate with law enforcement agencies and regulators to investigate crimes.
We also give a special place to crypto education. Our educational center, Binance Academy, offers users a variety of guides and educational materials on security issues in the world of cryptocurrencies.
All of these measures help Binance maintain a safe space for cryptocurrency users and ensure that the company remains a leader in protecting its users from illegal activities.
What changes have occurred in the crypto industry over the past few years? What factors influence the cryptocurrency rate?
This is a very broad question. The cryptocurrency industry is very dynamic, events and developments in it are happening very, very rapidly.
But the main and constant trends in the market are the following:
Increased penetration of cryptocurrencies: cryptocurrencies have become more accessible and popular among the public, incl. for daily consumer payments. Investments in cryptocurrencies and blockchain technology by large institutional investors and companies.
Regulation: Governments around the world have begun to actively regulate cryptocurrencies, creating a more stable and reliable investment environment.
Speaking about the factors influencing the rate of cryptocurrencies, they are also quite multifaceted and diverse. Cryptocurrencies, like any commodity, prices for cryptocurrencies are formed mainly on the basis of supply and demand.
An equally important factor is the news background: information about changes in regulatory policy, technological innovations or significant investments can significantly affect the value of cryptocurrencies.
The third and quite significant factor is the global political and economic situation: events on the world stage, such as political fluctuations, economic crises and monetary policy also have a strong influence on cryptocurrency rates.
What opportunities does blockchain technology open up for various sectors of the economy?
Now, unfortunately, there is not yet a single clear example of the use of blockchain technology in traditional sectors of the economy, but it has a lot of opportunities. Technology is created to optimize and improve many aspects of life.
Speaking of application, I would say that it can generally be used almost everywhere.
Blockchain facilitates payments and transfers, including international ones, by eliminating intermediaries and ensuring transparency of transactions. It also allows you to create smart contracts, automating complex financial transactions.
With the help of blockchain, goods or services can be tracked at every stage from manufacturer to buyer, which ensures reliability and guarantee of the entire supply chain.
In healthcare, blockchain can create universal EHRs (electronic medical records), which can become a unified patient database.
For educational purposes, academic data, diplomas and certificates can be stored on the blockchain, and their authenticity and reliability can be verified through the blockchain.
Property data, including cadastral information and proof of ownership, can be digital and stored on the blockchain.
And although these are not all the possibilities of blockchain technologies, with their development, more and more new horizons are opening up. We will wait for new breakthroughs in this area.
What trends are observed in the development of the crypto industry and how can they affect the future of this sector?
This is also quite a broad question. But I would highlight three main trends:
Growing interest in the market on the part of institutions: More and more large investors and companies recognize the importance of cryptocurrencies and decide to invest in this sector. This is considered a significant step towards increasing the mass acceptance of cryptocurrencies and could lead to a significant increase in the capitalization of this market;
Rise of DeFi (Decentralized FinTech): DeFi, or decentralized financial technology, is another important trend. They promise to return control of finances to users, bypassing traditional intermediaries such as banks;
Regulation: Governments of many countries are working to formulate a legislative framework that would effectively regulate the cryptocurrency industry. This approach can increase confidence in the crypto industry and make it even more attractive for investment.
Tell us about Binance’s plans in the Georgian and Central Asian markets.
We plan to build a strong and effective structure of relationships between all players in this industry that actively support its infrastructure. This includes direct interaction with our end users, regulators and external partners such as banks, retailers and media.
Our main goal in all countries is to rapidly improve all products and tools that facilitate the integration of cryptocurrency into everyday life. We are ambitious about the future, setting ourselves the task of making cryptocurrency a universal, daily used tool for all our clients.
