Davos Forum | Zhao Changpeng: Crypto payments are not yet mature, meme coins carry high risks, global regulation unification is "impossible in the short term"

Binance founder Zhao Changpeng (CZ) discussed the risks of the crypto industry, the slower-than-expected progress in payments, the highly speculative nature of meme assets, and the fundamental challenges of global regulatory fragmentation at the “New Era for Finance” forum at the World Economic Forum (WEF, Davos Forum). He emphasized that technological acceleration does not bring more risks; it only exposes problems faster, and that the true “structural weakness” in the financial system lies in the design of traditional banks.

Payment progress slower than expected: Unmatured after ten years of promotion

CZ admitted that despite continuous efforts to promote crypto payments over the past decade, they have yet to become mainstream. “If you had asked me ten years ago, I would have promoted Bitcoin payments; ten years later, we still haven’t truly achieved it.”

Although the crypto industry has invested significant resources in building payment channels, he believes that market demand, user habits, and regulatory environments have made it difficult for crypto payments to break through. This is a common phenomenon in innovative technology: “Most will fail, but a few successful cases can have exponential impact.”

Meme coins: Highly speculative and difficult to sustain

Regarding the cooling of the NFT craze, he predicts that meme coins may follow a similar path. “I might get criticized by the crypto community, but most meme coins won’t last very long.”

He pointed out that a few culturally symbolic assets, like Dogecoin, can last over ten years, but the vast majority of meme coins are highly risky, speculative assets that are difficult to establish practical use.

Technology acceleration is not the risk; the design of traditional banks is the problem

In response to concerns that AI might accelerate market panic and trigger bank runs, CZ offered a different perspective:

Technology acceleration does not create risks; it accelerates the exposure of problems

He explained that if a bank already has liquidity gaps, speeding up withdrawals will only reveal the problem faster, not cause it. “Slowing down withdrawals doesn’t solve the problem; it just prevents more consumers from accessing their money.”

Crypto exchanges vs. banks: Stress testing

He cited Binance’s experience at the end of 2023, which faced “a net outflow of $14 billion in one week”:

• Peak daily withdrawal: $7 billion
• Total weekly withdrawals: $14 billion
• Platform operated without liquidity issues

In contrast, traditional banks: “I don’t know of any bank that can withstand the same liquidity pressure.”

CZ stated that the real issue lies in the fractional reserve system adopted by banks, which is a structural risk in the financial system, not AI or withdrawal speeds.

Global regulation: Fragmented, difficult to unify, unlikely to form a global regulatory body in the short term

CZ pointed out that while regulation of banks and securities markets is highly mature and similar across countries, crypto regulation “varies completely by country,” and many countries have not yet established regulatory frameworks.

Currently, Binance holds 22–23 international licenses

But the vast majority of countries worldwide still lack regulatory frameworks

Key legislation such as the US Market Structure Bill is still underway

Some countries like the UAE, Bahrain, Pakistan, and Kenya are accelerating the establishment of friendly regulatory systems

He also revealed that he is assisting multiple governments as an advisor to draft crypto policies, but differences in capital controls, tax systems, and policy priorities make global regulatory unification nearly impossible. “Crypto assets are the same worldwide, but each country’s regulatory priorities are completely different. Establishing a unified global regulatory framework is very challenging.”

“Regulatory passports” may appear first, rather than a global regulatory organization

Regarding cross-border regulatory cooperation, CZ believes the most pragmatic first step is:

Regulatory Passporting

which allows a license obtained in one country to be recognized by others.

He said some countries have begun discussing mutual recognition systems. Since establishing a new global regulatory organization is very difficult, slow to promote, and hard to implement, passport systems are more likely to be adopted first. “Global new organizations are difficult to push into execution; it often takes years. Mutual recognition of regulations may be the first step to happen.”