Binance cryptocurrency exchange has once again gotten caught in the crosshairs of a regulatory body, and this time it is in the UK. This is just one in a series of sanctions that the exchange has faced as they try to bring crypto to the mainstream but at the same time, these occurrences remind us of the importance of decentralized exchanges.
Despite Binance's good intentions, the company often gets caught up in tussles with various countries' regulatory bodies. In the past, there has been Germany and Japan, amongst others, so of course, adding this to the list is ammunition for FUD peddlers.
Binance is one of the top exchanges in the world and home to the highest volume of daily trade in the world. Naturally, bears will pile on this fact to score points but we know better.
Since the news got out, the market has rallied in some sort of way, as we continue our journey to recovery. However, this doesn't take away the fact that despite the efforts of central exchanges, they're never going to be accepted by regulators.
Trying to be normal
In the midst of everything going wrong, there seems to be this endless fascination with crypto companies trying to seem "normal". For example, Coinbase got listed in the traditional exchange and then there's also the tedious regulatory clearances that exchanges require to be "accepted".
I don't know how this sounds but crypto will never be accepted by regulators. The best they can do is condone it and in some cases, milk it but acceptance is something we'll never get.
Speaking on the topic of acceptance in isolation, I don't think that's a bad thing. In fact, I don't think cryptocurrencies were ever meant to be accepted by the government, and even though countries like El Salvador have embraced it, I'm pretty sure it will come with a lot of regulations that will just turn crypto into fiat.
In any case, the fundamental of crypto remains decentralized, so while central exchanges like Binance continue to face intense scrutiny, they should realize that this is going to be a norm. In fact, central exchanges also face scrutiny in the crypto circle, as with the case of Hive vs Steem, we saw a number of them supporting one party over the other, instead of staying neutral.
With that said, it is important for Central exchanges to understand that the real victory isn't in getting accepted by governments. The real victory, as we see in countries like India and Nigeria, is staying relevant DESPITE the government.
When you look at the situation in my home country that I have talked about on numerous occasions, you find a self-driven and fully decentralized crypto space. We have no government "protection" or regulation, and use p2p for trading between fiat and crypto.
Dexes fix this
The biggest challenge that Dexes experience is onboarding. However, I believe that a system similar to the P2P method used in Nigeria could be employed to create an onboarding mechanism.
Anyway, Dexes don't have the same regulatory requirements as central exchanges. In fact, as far as I can tell, Dexes have none, so they won't be subject to the annoying regulatory sanctions that Binance exchange is facing.
Think of it from this angle; everybody can use Binance smart chain DEXes but not everybody can use Binance exchange. This simple fact highlights the importance of Dexes in pushing the crypto dream forward.
Moving forward
The endless quest for acceptance and "favorable regulations" for crypto to thrive has actually done more harm than good. Big players in the industry keep trying to make crypto seem more appealing to the government and gain favours that will protect their assets.
There's no metric to measure intentions, so I might be wrong in part, there's still no doubt that the industry is regularly plunged into disrepute because of the insistence on "fair" regulations. There's never going to be fair regulation and even when you're "accepted", you're always going to be walking on thin ice.
I believe the best thing central exchanges can do is start migrating their operations and resources to become Dexes. In the long run, this will create a bigger network and interconnect the crypto space. This isn't the time to be alone, this is the time to build bridges and Dexes will be the bridge.
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