Highlights From CZ’s May 1 AMA
On May 1, 2023, Changpeng Zhao (CZ), Binance’s CEO, spent an hour on Twitter Spaces, answering questions from the audience. Here’s a summary of his responses.
CZ argued that, to achieve success, crypto doesn’t need banks to have problems. Rather, it is upon us to make crypto easier to use and expand the range of use cases and utilities that will drive adoption.
If many people trade, want, and use a coin, then Binance will most likely list it. If the coin only lasts for two weeks, then we probably won't.
It's still early for NFTs, and the technology has huge potential.
What follows is a summary of CZ’s answers to some of the questions he received during a Twitter AMA on May 1, 2023. Please note that this transcript has been edited for length and clarity.
On Banking Versus Bitcoin
Another American bank collapsed recently [First Republic]. What do you think the current state of the US banking system means for Bitcoin and crypto?
CZ: The success or failure of banks doesn't have much to do with crypto. There is a little bit of a relationship. People store money in banks. When they can't store money in banks, they may look at other avenues, and crypto is one of them. But it's not the only one. People buy stocks, put money in real estate as well as gold. Now there's another alternative, which is crypto.
In my opinion, crypto is one of the best choices. It has a different set of risk characteristics, but a lot of advantages. It's very liquid, it's very easy to carry, it's very easy to transact, and it's mathematically limited in supply. It's very easy to verify, it's very transparent, it’s very open, it's very inclusive, and very global. But it's highly volatile. And it's still relatively new.
From the crypto community’s perspective, we shouldn’t rely on the failure of others for our success. We should make crypto easier to use, with more utility, use cases and adoption, so that we increase the usage and value of crypto. I don't view it as a zero-sum game. Crypto can coexist with banks and traditional fiat currencies. We just have to make what we do better.
The more successful the banks are, the better it is for crypto, because the more everyone is successful in the economy, the more money and value there is. The more people, the more activity, the better it is for everyone. That's how I view things.
On Francophone Countries
What is the plan for Binance in French-speaking countries?
CZ: Binance is a global platform. We try to expand in as many countries as we can regardless of language. Wherever is positive on crypto, we're there. I think that, out of all the crypto founders, I’ve probably visited the most French-speaking countries. We have a big presence in France. We also have a big French-speaking team. And we have local teams in many of the African countries, both French and English-speaking. We’re not everywhere, but it’s a large world.
As for myself, my French sucks. That's the course that brought down my GPA in high school. I was attending school in Vancouver in Canada, and French is actually one of the mandatory secondary languages. It was difficult for me. I’ve actually been trying to relearn French using an app on my phone for a while. I had a 48-day streak at one point, then it was broken.
I tweet more in English, and that may have skewed the exposure a bit, so I apologize about that. But that's limited by ability, not by willingness. There's nothing particular about any language or any region. Crypto doesn't care what language you speak or which country you are in.
On Identity Verification
Can you talk about your KYC processes and potential problems with those processes?
ID verification is an important part of our security and compliance systems. Binance is probably one of the few global crypto exchanges to have enforced global KYC (know-your-customer) processes. Even today, there are many smaller exchanges that do not enforce full KYC. But we feel that we need to lead by example when it comes to compliance.
But yes, there are instances where KYC can impact the user experience. There are more documents to upload, and sometimes the system doesn't work as well as it should. For example, in certain countries, there might be instances where names that might sound similar or be spelled in a similar way are falsely flagged as PEPs (politically exposed persons).
We're trying to improve that. We try to localize our KYC solutions, but it's difficult. There is also the user experience side. How do we improve that while being super compliant? It's tricky. We're not perfect, and we're working on it. That's one of the big projects I have spent quite a lot of my time working on.
What are some of the challenges that you've encountered when trying to comply with regulations in different parts of the world? What would make your life easier?
CZ: Oh my God, there are a lot of different challenges. I think the number one challenge is really banking support. If banks are willingly working with crypto, especially exchanges, then we can really facilitate the flow between traditional financial systems and crypto financial systems. So banking support is usually the biggest one we look at. But there are many others.
We try to spend more effort in the countries that are pro-crypto and less effort in the countries that are less favorable. But we do have a large policy team that comments on different regulatory frameworks, gives advice, consultants, etc. I think it's very important to get the regulatory framework done well in multiple countries. The first draft of many regulatory frameworks may be overly restrictive. I think that's natural, but with time, hopefully with industry comments, we want to participate in that process, and try to improve them.
Other than that, there's a lot of little challenges here and there. The industry is so new that it's not going to be easy. So we have got to continue to keep our heads down, build products people use, and work closely with governments and regulators all around the world.
On Meme Coins and Token Listings
How popular does a meme coin have to become before Binance lists it?
CZ: I can't comment on any listings or projects. We have strict policies that even if we’re talking with a project team, we forbid them from disclosing anything. There's a lot of potential for insider-trading accusations, leaks, or other problems. So I don't comment on specific projects.
But I'll comment on meme coins in general. I personally never really understood meme coins. There are many successful people who do seem to understand them, including Elon Musk, and others, so we go by users. If a coin has a lot of users trading it, wanting it, playing with it, etc., then we’ll most likely list it. If the coin only lasts for two weeks, then we probably won't. But if it holds, then we probably will. So we view coins from a user perspective.
On meme coins, I don't really understand them, but I'm deliberately not involved in Binance’s listing process. I don't have the time. And I don't want to get involved. I don't want to be pushing any coin for listings because I don't want to be associated with that process.
We have an independent team that evaluates these things. We listed SHIB and it's actually one of the coins on Binance with higher trading volume. So we're not against meme coins. We're not against any coin. The number one criterion is users, but we also look at other things.
On Introducing the Next Generation to Crypto
When do you think kids should get involved in crypto?
CZ: I think it's really important that kids learn about finance, including crypto, and it’s inevitable that they’ll learn about it. Kids will grow up thinking crypto is very native. The next generation of kids that grow up, they will use crypto. They're very open to it.
Right now, Binance Academy has content that is more appropriate for adults. But it’s important for kids to learn financial concepts when they're young so that these things become native. I truly believe that we shouldn't teach kids to just study hard, work hard, and earn a salary. I don't think that will work well in the future.
The future is much more about entrepreneurship, innovation, and global commerce. With global commerce, you've got to understand money. So I think that's important. We haven't done as good of a job in this area as we could have, but that's something that we should be looking at.
There are a lot of prominent NFTs, but most of them are on the Ethereum blockchain. Some projects have been bridging their NFTs to Binance. Are you exploring this?
CZ: When it was conceptualized, one of the mandates for the BNB Chain ecosystem was high capacity and low fees. Trying to reduce gas fees on the blockchain was the goal.
NFTs weren't really a focus back then. So architecturally, that's why we still see the majority of NFTs on Ethereum, which is fine. But there are multiple initiatives in the BNB Chain ecosystem to try to enhance that and to try to win more NFT projects over. I personally have never bought a single NFT, but that doesn't mean I don't like NFTs, it doesn't mean I don't believe in the tech.
The technology has huge potential. But I'm not an investor or a collector. I don't do most things other people do. I just do a limited number of things and try to do them well. I'm a builder. I try to build platforms for people to use. I view myself as the blacksmith that makes tools for others.
You can listen to a recording of the AMA in full here.
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