CZ Changpeng Zhao speaks at Davos: Crypto payments are not yet mature, meme coins carry high risks, and regulation is difficult to unify in the short term

Zhao Changpeng directly stated at Davos that progress in crypto payments is limited, meme coins are highly speculative, and the real risks are not in technology but in traditional banking and fragmented regulation.

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

Payment progress not meeting expectations: still immature 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 asked me ten years ago, I would promote Bitcoin payments; today, ten years later, we still haven’t truly achieved it.”

Although the crypto industry has invested significant resources in building payment channels, he believes market demand, user habits, and regulatory environments have made breakthroughs difficult. This is a common phenomenon in pioneering new technologies: “Most will fail, but a few successful cases can have exponential impacts.”

Meme coins: highly speculative and difficult to sustain

Regarding the cooling of the NFT craze, he predicts 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 cases.

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 very different perspective:

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

He noted that if a bank already has liquidity issues, 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, when it endured a “net outflow of $14 billion in one week”:

• Daily maximum withdrawals of $7 billion
• Total weekly withdrawals of $14 billion
• Platform operated without any 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 speed.

Global regulation: fragmentation, difficulty in unification, no immediate global regulatory body

CZ pointed out that while banking and securities market regulation are highly mature and have similar cross-national rules, crypto regulation “varies completely by country,” and many countries have not even established regulatory frameworks.

• Binance currently holds 22–23 international licenses
• But the vast majority of countries worldwide still lack regulatory frameworks
• Key legislation like the US Market Structure Bill is still underway
• Some countries like UAE, Bahrain, Pakistan, and Kenya are accelerating the establishment of friendly regulatory systems

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

“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

That is, obtaining a license in one country that can be recognized by others.

He said some countries have already 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. “Creating a new global agency is difficult to push into execution; it often takes years. Mutual recognition of regulations may be the first step to happen.”

• This article is reprinted with permission from: 《Chain News》
• Original title: 《Davos Forum｜Zhao Changpeng: Crypto Payments Not Yet Mature, Meme Coins High Risk, Global Regulation ‘Impossible in the Short Term’》
• Original author: Elponcho