The Web3 sector needs stricter regulation to ensure these technologies are used fairly

As the Crypto and Web3 industry continues to grow and mature, regulation can no longer be done predominantly through enforcement actions. Instead, the industry must move towards a regulatory and legislative framework that recognizes the potential and importance of digital currencies and applications such as decentralized finance (DeFi), a term used to describe a variety of financial services that can be performed. without the institutional intermediaries of the world of traditional finance. Let’s find out why we need more decentralization in 2023 and also why the Web3 sector needs tighter regulation of centralized crypto players.

While some cryptocurrency users argue that regulation destroys the fundamental decentralization of Web3, there are benefits to regulating Web3 for users and “investors,” and also for cryptocurrency players such as wallet providers, exchanges, token issuers, and cryptocurrency companies. decentralized finance (DeFi). Let’s get closer to the particular benefits that both users and companies can obtain from a good set of standards suitable for Web3 and the crypto market. Government regulations seem impossible for truly decentralized protocols, and they are. This is why Indian and global Web3 stakeholders are not calling for decentralized networks to be regulated.

In a recent blog post, Coinbase CEO and co-founder Brian Armstrong wrote: “The role of financial regulators should be limited to centralized cryptocurrency players, where additional transparency and disclosure is needed. In an on-chain world, this transparency is built in by default and we have an opportunity to build even stronger protections.” Crypto regulations for centralized players can only come from government authorities, and are designed to protect consumers and ensure that these technologies are used fairly and transparently.

The banking giant added that the recent crypto crashes are not due to decentralized protocols but to centralized crypto players. With this, the Web3 industry worldwide expects accelerated crypto regulations in all jurisdictions in 2023.

FTX collapses a lens to scrutinize a volatile market

FTX Trading Limited was founded in 2017, incorporated in Antigua and Barbuda, and is headquartered in The Bahamas. The founders were Sam Bankman-Fried, who became CEO of the company, and Gary Wang, CTO. The private entity operated a major cryptocurrency derivatives exchange and trading platform, FTX.com, which claimed more than 1.2 million registered users as of early 2021. In January, FTX raised $400 million in a funding round from Series C, valuing the cryptocurrency exchange at $32 billion. In March, the FTX token, FTT, had a capitalization of $14 billion. FTX was commonly cited as the second largest cryptocurrency exchange after giant Binance Holdings Ltd., which dwarfs competing exchanges.

A 2021 NASSCOM industry report on Cryptotech estimated that over 800,000 new jobs could be created by 2030 in the Indian Web3 industry. But the vacuum around proactive policy discussions could eventually snowball in talent and capital flowing out of our country and a loss of India-centric IPs in the Web3 space. Currently, the political narrative around Web3 is sadly viewed through the prism of a unique crypto trading use case.