Important notes
Binance CEO Changpeng Zhao (CZ) answered questions from users on Twitter Spaces for an hour on May 1, 2023. We have summarized the answers for you.
CZ said crypto doesn't need banks to have problems to succeed. Instead, it is up to us to make crypto easier to use and expand the range of uses and services that will drive adoption.
If many people buy, sell, want and use a coin, Binance will most likely list that coin. If the coin has a lifespan of only two weeks, then we probably won't list it.
NFTs are still at a very early stage and this technology has huge potential.
The remainder of the article includes a summary of CZ's answers to some of the questions asked at the Twitter Q&A Event held on May 1, 2023. The transcript has been shortened and edited for clarity.
On Bitcoin and Banking
Another American Bank [First Republic] recently went bankrupt. What do you think the current state of the US banking system means for Bitcoin and crypto?
CZ: The success or failure of banks has little to do with crypto. There is little relationship between them. People keep their money in banks. When they cannot keep their money in banks, they can turn to other areas, and crypto is one of these areas. But it's not the only area. People buy stocks and invest their money in real estate and gold. Now there is another option, and that is crypto.
I think crypto is one of the best options. It has different risk characteristics but also many advantages. It has high liquidity, it is very easy to carry, it is very easy to trade, and its supply is mathematically limited. It is very easy to verify, very transparent, very open, very inclusive and very global. But it's also very volatile. And it's still very new.
From the crypto community's perspective, we shouldn't need the failure of others to succeed. We must make crypto easier to use and offer more services and uses, so we can increase the use and value of crypto. I don't see this as a zero-sum game. Crypto can coexist alongside banks and traditional fiat currencies. We just need to do what we do better.
The more successful the banks are, the better for crypto, because the more successful everyone is in the economy, the more money and value increases. More people bring more activity, which is better for everyone. This is my perspective on things.
On French-Speaking Countries
What is Binance's plan for French-speaking countries?
CZ: Binance is a global platform. We are trying to expand to as many countries as possible, regardless of language. Wherever there is a positive attitude towards crypto, we are there too. Of all the crypto founders, I have probably visited the most French-speaking countries. We have a significant presence in France. We also have a large French speaking team. And we have local teams in many African countries that speak both French and English. We're not everywhere, but the world is huge.
As for me, my French is terrible. My GPA in high school dropped because of this course. I was studying in Vancouver, Canada, and French was one of the compulsory second languages. I had a hard time. I've actually been trying to learn French again for a while now, using an app on my phone. At one point I used the app for 48 days straight, but then I couldn't continue.
The fact that I tweet more in English may have given the impression that I prefer English, for which I apologize. But this is due to my skills, not my desire. We do not approach anything specific to any language or region. Crypto doesn't care what language you speak or what country you are in.
On Authentication
Can you tell us about your KYC processes and possible problems with these processes?
Authentication is an important part of our security and compliance systems. Binance is probably one of the few global crypto exchanges that enforces KYC (know your customer) processes worldwide. Even today there are many smaller exchanges that do not implement a thorough KYC process. But we think we need to lead by example when it comes to compliance.
But yes, KYC can sometimes affect the user experience. More documents need to be uploaded and the system sometimes does not work as well as it should. For example, in some countries there may be cases where names pronounced or spelled similarly are incorrectly marked as PEP (politically exposed person).
We're trying to improve this. We are trying to localize our KYC solutions, but this is difficult to do. There is also the user experience aspect. How can we improve this while still being highly adaptable? It's a little complicated. We're not perfect and we're working on it. This is one of the big projects that I spend most of my time working on.
On Legal Regulations
What challenges have you encountered trying to comply with regulations in different parts of the world? What would make your job easier?
CZ: We faced so many different challenges. I think the main challenge is really banking support. If banks agree to work with crypto, especially exchanges, then we can create a flow between traditional financial systems and crypto financial systems. That's why banking support is often what we need most. But there are many other things too.
We try to spend more effort in countries that are pro-crypto, and less effort in countries that are more negative towards crypto. But there are people who comment on different regulatory frameworks, make recommendations, consultancy etc. We have a large policy team that provides support. I think it is very important that the regulatory framework is well established in many countries. The first draft of many regulatory frameworks can be extremely restrictive. I think this is natural, but we want to participate in this process to provide comments from the industry over time and try to make the frameworks better.
Apart from this, we encounter many different small difficulties. Our job will not be easy because the industry is very new. So we must continue to mind our business, develop products that people use, and work closely with governments and regulators around the world.
On Mem Coins and Token Listings
How popular does a mem coin need to be for Binance to list it?
CZ: I cannot comment on any listings or projects. Even when we are in conversation with a project team, we have strict policies that prohibit them from sharing any information. There is a lot of potential for accusations of insider trading, leaks, or other problems. That's why I don't comment on projects.
But I will comment on meme coins in general. Personally, I have never fully understood meme coins. There are many successful people like Elon Musk and others who understand these coins, so we base on users. If a coin is traded, wanted, used by many users, then we will most likely list it. If the coin has a lifespan of only two weeks, then we probably won't list it. But if it manages to survive, then we'll probably list it. In other words, we evaluate coins from the user's perspective.
I don't really understand Mem coins, but I'm not particularly involved in Binance's listing process. I don't have time for this. And I don't want to get involved. I don't want to push for any coins to be listed, because I don't want to be involved in that process.
We have an independent team that evaluates these. We listed SHIB and it actually became one of the coins with the highest trading volume on Binance. So we are not against meme coins. We are not against any coin. Our first criterion is users, but there are other things we take into account as well.
On Introducing the New Generation to Crypto
When do you think kids should start getting interested in crypto?
CZ: I think it's really important for kids to learn about finance, including crypto, and it's inevitable that they learn about it. Children will grow up thinking crypto is very natural. The current new generation will use crypto when they grow up. They are very open to this.
Binance Academy currently has mostly adult content. But for these things to become natural, children need to learn financial concepts when they are young. I wholeheartedly believe that we should not just teach children to study hard, work hard at their jobs and get paid. I don't think this will work very well in the future.
There will be much more entrepreneurship, innovation and global trade in the future. For global business, you must understand money. So I think this is important. We haven't done as good a job as we could in this area, but it's something we need to focus on.
On NFTs
There are many NFTs of note, but most of them are on the Ethereum blockchain. Some projects link their NFTs to Binance. Are you working on this?
CZ: When the idea of the BNB Chain ecosystem was first put forward, the requirements that this ecosystem had to meet were high capacity and low fees. The goal was to reduce gas fees on the blockchain.
At that time, NFTs were not yet a focus. So architecturally, most NFTs are still on Ethereum, and that's okay. But there are many startups in the BNB Chain ecosystem trying to increase this and gain more NFT projects. I personally haven't purchased a single NFT, but that doesn't mean I don't like NFTs or believe in this technology.
This technology has great potential. I am not an investor or collector. I don't do most of the things other people do. I only do a limited number of things and try to do them well. I am a developer. I'm trying to develop platforms that people will use. I see myself as a blacksmith who makes tools for others.
You can listen to the entire Q&A recording here.
You can follow us on Twitter for news on CZ's next Q&A.
Further Reading
CZ's Tips for Listing on Binance
Smart Regulations Needed to Rebuild Trust in Crypto
10 Reasons to Buy and Sell NFT on Binance NFT