CZ's latest interview: Some G8/G20 countries are vying to attract Binance to establish its headquarters

Source: CNA Insider

Translation by: 0x22D, Rhythm BlockBeats

Binance founder CZ recently appeared on CNA's In Conversation interview program, where he was interviewed by CNA executive producer Lin Xueling. In the interview, CZ discussed Binance's recent negotiations with regulators and the challenges faced, as well as some advantages of the cryptocurrency system compared to fiat systems and biases against crypto.

CZ believes that cryptocurrency exchanges should make every effort to provide users with education related to crypto and should only serve those who are willing to accept crypto. Finally, CZ stated that the growth trend of crypto is obvious and will not stop; in the future, crypto and Binance will be everywhere. Rhythm BlockBeats has organized and translated the full interview as follows:

Host: Do you think there is a contradiction between accepting regulation and the decentralization and anonymity of crypto?
CZ: I don't think there is any contradiction. Many people's views are a bit extreme, believing that it is either regulated or completely unregulated. When you run a centralized exchange, being regulated makes sense because we are dealing with money. Regulation can indeed protect consumers, and with the right regulations, you can still encourage innovation, which allows us to integrate well with the traditional financial system.
Host: It seems that regulators in all major financial centers around the world are very cautious about what has happened with Binance recently. They have been saying no to you, or you have withdrawn applications yourself. Why haven't you been able to convince the regulators in major financial centers that accepting Binance is a good idea?
CZ: First of all, I disagree with your statement. We have seen many influential countries wanting to cooperate with Binance. I think some countries have realized that crypto is the future of finance. They also believe that the tax department is the foundation of all other departments. If you don't have a solid financial sector as a foundation, then your other sectors will be uncompetitive because you don't have the right way to transact.
So we have seen quite a few countries, and even some countries are competing to work with us, vying to attract us to establish our headquarters in their countries. I can't name specific countries, but they are all G7 or G20 countries.
We recently received approval from Bahrain, and we have also reached a partnership with Dubai, of course, there are others, but I don't want to announce them prematurely. In a few weeks, you will see more countries realizing they need to attract this industry.
Host: Bahrain and Dubai are certainly nice, but what about traditional financial hubs like New York, London, Frankfurt, and Singapore? What is stopping you from getting approval in those places?
CZ: For example, while Binance US has obtained licenses in 43 states in the U.S., New York has a special regulation that requires a three-year financial audit, while Binance US has only been established for two years.
In the other places you mentioned, in the UK, we previously withdrew our application, but we have changed that decision and are now working with UK regulators. Singapore is a small market but also a very important one, and we will continue to work with Singapore.
Not every country has fully established regulations for crypto yet. Even the existing crypto-related regulations focus only on a small part, which is centralized exchanges. They do not focus on DeFi, NFTs, fan tokens, and many other things.
In centralized exchanges, the regulations mainly cover KYC and AML aspects. These are certainly important, but if exchanges are to thrive and operate normally, there are other things like security, wallet management, how to handle customer disputes, what kind of new listing framework there is, etc. Very few regulations discuss these things. Many existing regulations are actually borrowed from banking regulations because regulators have not deeply engaged with crypto. So we are working with countries around the world, sharing what we have learned in practice to help them understand the entire industry.
In fact, the larger the country, the slower the action, while smaller countries often act more quickly. But now some of the largest countries in the world are paying attention to this field, and in these countries, you typically see two types. One is very supportive of crypto; they understand that the absence of crypto technology or the crypto industry will severely impact their development. The other is more reserved about crypto. They read some accurate or inaccurate reports, such as that Bitcoin is still being used by drug lords, and it is normal to have different views.
I'm not saying that everyone in the world has the best crypto regulations today; this industry is just getting started, so we usually spend more time in places that are more forward-looking or optimistic about crypto.
Host: Let's talk about what you just mentioned, because for those who are not very familiar with crypto, this is what they often see. You mentioned that crypto is used by illegal elements and scammers for money laundering. What measures do you think regulators can take, or what changes can you make to prevent illegal elements, scammers, etc., from using cryptocurrency?
CZ: I recently read a report forwarded to me by an ambassador from somewhere, which was very detailed and mentioned that only 3% of Bitcoin transactions are related to illegal activities or problematic activities. This percentage is very small and is actually lower than the proportion of fiat currency used for illegal activities.
I think many people do not understand this number, but what they can understand is that the news media no longer reports that Bitcoin is only used by illegal elements because industry reports clearly show that this is not the case.
Crypto has many use cases, and if you miss them, the entire economy could be affected. Through crypto, you can raise funds for your project on a global scale. If you are a good project, you have a good reputation, you are serious about your project, and people know you, you can easily raise funds for your project, which is called ICO, IEO, IDO, etc. This is much easier than traditional VC methods, but because it is too easy, it also attracts many scammers. However, for real entrepreneurs, this is a tool they can use.
There are also NFTs; NFTs are another way for artists to profit globally through their works. There is no such mechanism in any traditional field outside of blockchain. If you rely on galleries or museums, you won't get such high liquidity and returns.
Host: Don't you think crowdfunding through traditional platforms is the same?
CZ: It is not the same; you can try it. Traditional crowdfunding platforms are usually limited to one country, and due to the restrictions imposed by the current fiat system, it is difficult for users from other countries to purchase or participate. Even if people want to support your project, they cannot easily give you $200.
Host: What is stopping Binance from going global?
CZ: I think the truly bad thing is a blanket ban on crypto, which is not good. In my view, this will have a long-term negative impact on economic growth in those regions. This is a new technology, and while some people use it for illegal activities, that proportion is quite small and much lower than the proportion of fiat currency used for illegal activities. Embracing this technology has many benefits; no one can stop technological innovation. There are billions of people in the world who will continue to innovate. Embracing innovation is very important for economic development, so any blanket ban is usually bad.
Host: So you say the risks are actually very small and are overestimated compared to the benefits.
CZ: Yes, every industry has risks. People are still using dollars to buy drugs today, but that doesn't mean dollars are bad; illegal elements still have bank accounts somewhere, but that doesn't mean banks are bad. I'm sure illegal elements use the internet, but we won't shut down the entire internet because of that. We must separate these things; we do need to address those malicious users and reduce some existing problems, but the positive benefits are much greater.
Host: Previously, we interviewed an economist who believed that using cryptocurrency would lower many costs when migrant workers want to transfer money back home because it minimizes interactions and allows for very small transfers.
CZ: Yes, global remittances are a huge industry. Today, the cost of using these services is between 10-20%. If a worker wires $300 back home to support their family, they will be charged a fee of $20 to $30. These people are not very wealthy, but they are working hard, and if they want to support their families, they have to pay a fee of 10-20% just to transfer funds. But if they use cryptocurrency, it can cost only a few cents or even less.
Host: If I am in a small company and want to reduce payment costs, should I consider using cryptocurrency?
CZ: Of course. I think the world today is much smaller; we work with everyone around the world, not just with people in our own country. When it comes to cross-border payments, traditional fiat systems are very expensive and slow. Cryptocurrency is instant and very low-cost, making you more competitive internationally. Basically, any business that does not use cryptocurrency will put itself at a disadvantage.
Host: I spoke with someone who invested in cryptocurrency through Binance, and he thinks it's a gamble.
CZ: I think we should adopt the view that cryptocurrency has different users, and different users have different purposes. Just like people using dollars, they could be stock traders, currency traders exchanging dollars for euros, yuan, etc., or they could just be using dollars for payments.
In any industry, there will always be a small group of speculative traders, whether they are short-term traders or long-term traders. Some people call their behavior bad, while others call it investment. It depends on what you want to do; some people just use Bitcoin for payments. As for me, I never trade; I just hold Bitcoin, which I have held since 2014. Whether it is called a bet depends on your definition, but in every industry, different people use this new technology, and new asset types are used for different things.
Host: People investing on securities trading platforms often have more knowledge, and banks also provide advice, sometimes even checking whether investors are aware of the risks. Do you think cryptocurrency trading platforms should do the same?
CZ: I completely agree. I think the crypto industry needs more education. We have set up Binance Academy, which has nearly a thousand completely free videos and articles available for people to watch and read. We actually embed links to those articles in different parts of the website, such as when making deposits, where you can see articles embedded in the site that warn you about security risks. Recently, the Portuguese government reposted content from Binance Academy on their own website for digital education, of course, with our permission.
At the same time, we may be the only cryptocurrency trading platform with a responsible trading program. If we see users quickly losing money, we will stop their trading for 48 hours to let them cool down. If they continue to lose money, we will prohibit them from trading. Before accessing certain features on Binance, people must take a test. We ask some very specific investment questions, and only by selecting the correct answers can they proceed.
Host: If you stop them from trading when they lose too much, and they must choose the correct answers to move to some possibly less responsible trading platforms, right?
CZ: Yes, that is our approach; we do our best to educate our users.
Host: Why don't you collaborate with existing securities trading platforms? You have a background in computer science and have worked for the Tokyo Stock Exchange; you understand traditional securities trading platforms. So why not reach out to them to enter the mainstream? Wouldn't that solve many regulatory issues?
CZ: I think collaborating with them is definitely a good idea, but I wouldn't say that just by working with them, regulatory issues would be resolved. Today, in most places around the world, the regulations regarding cryptocurrency are not completely clear. I don't think collaborating with Nasdaq would eliminate regulatory concerns, but we are very willing to work with traditional trading platforms.
Host: Aren't you afraid they will eat into your market?
CZ: No, I think the more participants there are in the crypto space, the better it is for those who are already in it. For us, developing this industry is very important; this market is still young, so we can expand it by 1000 or even 10,000 times. The more people participate, the more opportunities will arise within this industry. If you are the only participant, then you are in the wrong industry.
I believe that decentralized exchanges will one day replace centralized exchanges, and when that day comes, we can also collaborate with decentralized exchanges. We can embrace this technology; we embrace everyone who emerges, we embrace technological innovation, we embrace competition, partnerships, and we embrace it all.
Host: Can we expect to see Binance approved in London, Frankfurt, or Singapore within 3 to 6 months?
CZ: Honestly, 3 to 6 months is a very short time, just as regulatory changes do not happen quickly, their thoughts won't change that fast either. In the long run, we aspire to exist in a fully compliant manner anywhere. While we may not be in your country in the short term, in fact, we are not in most countries right now, but that doesn't mean we won't be there in the future.
I predict that in the future, 5, 10, or 20 years from now, crypto will be everywhere, and Binance will also be everywhere.
Host: Indian Prime Minister Modi has said that cryptocurrency spoils young people. How do you change this mindset?
CZ: I think we don't need to change everyone's mindset. There are 8 billion people in the world, and everyone has different thoughts; they have the freedom to do so. I think we just need to serve those who accept crypto.
Personally, I believe that crypto is the most influential technology for our financial and industry economic growth, which is why I spend all my time in this industry. I fully believe that the newly grown younger generation will be crypto-native, but if another person does not share this view, they do not have to spend time in this industry.
Those in decision-making positions will have their views influence the growth of the industry, economic growth, and the lives of others. I sincerely hope that these people can see economic development as the main driving force and improve people's lives, thereby further developing the economy in the places they are responsible for.
We are seeing more and more people entering the crypto space at an astonishing rate; in just the past few months, crypto users in some places have increased by 300-500%. This industry is growing, but we don't need to let everyone in.
Host: Compared to the mainstream, crypto is still a small volume; although you say the growth is rapid, the original volume is not very large.
CZ: This industry is still in its early stages. I believe that currently, globally, the adoption rate of crypto is around 5%, based on the number of people holding cryptocurrencies. If you look at total net worth, the adoption rate of crypto is only 0.1%. Very few people put all their net worth into crypto. We also don't need to reach 100% directly; we can go from 5% to 10%, then to 20%, and up to 80%. The last 20% may take decades; for example, my mother is not a heavy crypto user because of her age, and she doesn't even know how to use an iPhone.
Crypto is still in a very early stage, so the scale is of course smaller, which is normal. However, I think the trend is obvious; the number of crypto users is growing and will not stop, which is important for us.
Host: Thank you very much, CZ, for accepting our interview!