Article Organizer: Lesley
Source: MetaEra
On August 27, at the "Hong Kong Crypto Finance Forum," Zhao Changpeng (CZ), the founder of Binance, the world's largest digital asset exchange platform, systematically elaborated on his forward-looking thoughts on the future development of the industry.

Zhao Changpeng (CZ) focused his discussion on five themes: the evolution of stablecoins and their strategic position against the US dollar, the regulatory and liquidity bottlenecks of RWA, the potential of decentralized exchanges, the new investment directions provided by the crypto asset treasury (DAT) model for traditional investors, and the transformative trading models brought by the integration of AI and Web 3.0.
CZ's views not only reflect his profound insights into the current industry development but also showcase his strategic thinking about the future landscape of digital finance. These insights are of significant reference value for understanding the development trends and investment opportunities in the crypto finance industry.
The following text is organized based on CZ's on-site viewpoints, with an effort to maintain his original expressions.

Zhao Changpeng (CZ) on Stablecoins: From Volatility "Safe Haven" to Globalization Tool for the US Dollar

In fact, I am not an expert in the field of stablecoins, but Binance's platform carries about 70% of the global stablecoin trading volume, making us the most important distribution channel for stablecoins in the industry.
Let me briefly introduce the development history of stablecoins. The earliest stablecoin technology prototype was "Colored Coins," which was the Bitcoin community's initial exploration of "asset on-chain" solutions. In 2014, USDT was initiated by Brock Pierce, and the project initially developed slowly. Subsequently, Pierce gradually withdrew, making way for the current USDT team led by Craig Sellars, and by 2017, there was still not much progress.
When Binance was established in 2017, we focused on crypto-to-crypto trading, supporting trading pairs like Bitcoin to Ethereum, BNB, etc., but lacked fiat trading functionality. This created a user experience issue: whenever the price of Bitcoin dropped, users could only withdraw Bitcoin to other fiat exchanges to convert it into fiat, and there was significant uncertainty about whether those funds would flow back to our platform.
At the same time, this was also very unfriendly to user experience. To improve user experience, we decided to support USDT as a "safe haven" during market downturns. At that time, we understood stablecoins as a short-term store of value, so the decision to support USDT was relatively simple—there were no complex cooperation agreements signed, nor was it a strategic partnership; it was simply the integration of this product.
At this point, USDT entered its rapid development phase:
First, after 2017, crypto-to-crypto exchanges entered a rapid development phase, and many platforms, including Binance, began to support USDT, driving its rapid growth.
Subsequently, USDT experienced a second wave of growth: many Asian users had a demand for US dollars, but faced difficulties in directly opening US dollar accounts, and USDT provided them with an alternative. Tether's profitability has always been outstanding, and due to regulatory pressures from the US and difficulties in banking cooperation, they have remained relatively low-profile.
In 2019, US compliance agency Paxos proactively contacted us, proposing a partnership to issue stablecoins, which led to the later BUSD. From 2019 to 2023, BUSD's market cap grew to $23 billion, during which we invested relatively little resources, mainly doing some brand support and promotional activities, such as the "zero withdrawal fee" campaign.
In 2023, the US government phased out the BUSD project. If BUSD had continued, it would have had a good development scale, as its growth rate at that time was surpassing that of USDT and USDC. It is worth emphasizing that when the BUSD project was shut down, all user funds were fully refunded, which fully demonstrated the characteristics of BUSD as a compliant, transparent, and secure project.
Stablecoins and exchanges have become one of the core profit segments in the crypto finance field. Their business model is highly simplified: after obtaining a compliance license, users deposit funds, and the platform can issue tokens; when users redeem tokens, the platform provides cash exchange. This model has low barriers to entry, high liquidity, and enormous market potential, with significant long-term profitability.

From a national strategic perspective, the US government's attitude towards stablecoins has undergone significant changes in recent years. This current US administration is very smart; leveraging its business background, it deeply understands the strategic value of Tether to the global position of the US dollar. Currently, about $100 billion in USDT is used to purchase US Treasury bonds, and Tether is widely used globally. The key point is that Americans themselves do not need stablecoins—they can directly use the bank ACH system for US dollar transactions. Almost all USDT users are outside the US, which effectively expands the global influence of the US dollar.
This aligns closely with China's desire to expand the international influence of the Renminbi. Stablecoins are essentially tools that help underlying currencies achieve globalization, which should be of great appeal to various countries. Of course, as freely circulating blockchain assets, stablecoins do pose challenges to foreign exchange controls, but these issues can also be resolved. Currently, the dozen or so countries I have interacted with have shown strong interest in developing local stablecoins, with everyone hoping their fiat currency can go on-chain.
When the US passed the "GENIUS Act" in July, it proposed policy directions to restrict the development of central bank digital currencies (CBDCs), reflecting a profound strategic layout regarding the global dominance of the US dollar. The popularity of stablecoins is precisely due to their high liquidity and good user experience, while some government-led digital currencies may face stricter regulations and monitoring, which could negatively impact market acceptance. In fact, since 2014, more than 20 countries have attempted to issue CBDCs, but none have truly succeeded at the market level.
Blockchain technology is essentially a ledger technology, and its first application scenario is finance; therefore, stablecoins are a natural application of blockchain technology. Currently, we only see the development of US dollar stablecoins being relatively mature, while stablecoins for other national currencies have yet to emerge, indicating that there is enormous growth potential in this track in the future. Now, every country wants to develop stablecoin businesses. I believe every country should at least have several stablecoin products.

Zhao Changpeng (CZ) on RWA: The Triple Challenges of Liquidity, Regulation, and Mechanism

Although the RWA (Real World Asset tokenization) track has broad market prospects, its implementation difficulty is far higher than market expectations. The specific challenges can be summarized in three aspects:
1. Liquidity Dilemma
From a practical perspective, products with strong financial attributes are relatively easier to tokenize, mainly because traditional financial products inherently possess high trading attributes, and their digital representation is relatively mature. However, the tokenization of non-financial assets faces fundamental obstacles. Although theoretically, one can "Tokenize Everything"—all cities, buildings, and individuals can issue tokens—in practice, there are numerous issues.
Taking real estate as an example, even in the volatile Hong Kong real estate market, the volatility is still much smaller compared to Bitcoin. Such low-volatility assets, once tokenized, have weak trading characteristics due to their limited fluctuations, resulting in insufficient order book depth. This leads to lower liquidity, and investors will not place many orders, creating a vicious cycle: if the order book is too shallow, trading volume will decrease. If investors try to enter or exit with hundreds of millions in funds, it is almost impossible to execute; even if the asset is on-chain, liquidity remains insufficient, making it more prone to unexpected fluctuations and even short-term manipulation.
2. Regulatory Complexity
Products with financial attributes often involve a core question—are they securities? Are they securities, commodities, or something else?
In major countries or financially developed nations, there are clear definitions and different regulatory bodies; in some smaller countries, one regulatory body may oversee everything. If different regulatory bodies are involved, compliance requirements can become quite complex. Companies need to apply for different licenses: futures licenses, spot licenses, digital currency licenses, bank custody licenses, etc. When a company holds many licenses, its business model may also be limited, and often, a single business cannot even get off the ground.
3. Product Mechanism Defects
In my view, the tokenization of securities in the US is currently not viable at the product level. The stock tokenization products we see now, such as xStocks, do not have their token prices linked to real stock prices, which is unreasonable. Theoretically, if there is a price difference between the two, investors can profit through arbitrage. However, the reality is that this price difference persists—indicating that the product's mechanism itself is not functioning. In other words, in the current stock tokenization track, there is no real linkage between tokens and stocks, so the entire model is not established at the product level. Although the US is trying various tokenization methods, it has yet to find a truly viable solution.

Despite these challenges, there is still a truly operational RWA model—stablecoins. The underlying assets of stablecoins are primarily traditional financial instruments like US Treasury bonds, and this model's success has validated the feasibility of financial asset tokenization.
The US dollar has already been tokenized through stablecoins. In the current blockchain ecosystem, almost all assets are denominated in US dollars, while the euro and renminbi are largely absent in this field. As the world's largest stock market, the US attracts global investors to purchase US stocks through blockchain technology, which is extremely beneficial for its economic development. If US stocks can also be smoothly tokenized, it will further consolidate the US's dominant position in the global financial market.
From a rational perspective, the US should actively support this development direction; other countries that do not participate in this transformation may face the risk of being marginalized. For example, the Hong Kong Stock Exchange, as an important exchange with global influence, may gradually lose its influence if it is absent in this round of transformation. Other Asian exchanges, such as the Shanghai Stock Exchange, face the same strategic choices.
Economically speaking, this is something that should be done 100%; not doing so will lead to elimination. Just as China could be completely dominated by Amazon in the e-commerce market without Alibaba, the absence in the fintech sector will also have far-reaching economic impacts.
Despite the regulatory challenges, this trend has extremely profound implications for the economy, and all countries should seriously consider relevant layouts. With the wisdom and innovative capabilities of Asians, these issues will eventually be resolved, and one of the keys lies in seizing the timing.
For commercial institutions and entrepreneurs, it is essential to accurately grasp the rhythm during the market window period: entering too early may face survival pressure, while entering too late may miss the opportunity.
Currently, we are in a rare golden window period. The US government's unprecedented supportive attitude towards virtual currencies will inevitably drive other countries wishing to develop their economies to take corresponding actions. Hong Kong, as a long-standing financial center in Asia, coupled with the supportive attitude of the Hong Kong government, presents a rare historical opportunity. Therefore, everyone should fully seize this strategic opportunity.

Exchange Transformation: Decentralization Will Surpass Centralization, How Can Hong Kong Seize the Opportunity?

The Essence of Exchanges and Future Vision
I believe that exchanges should not limit tradable assets; all assets should be able to circulate freely on the same platform.
Once all assets are on-chain, they are merely a token, whether they are crypto-native assets or real-world assets (RWA); from the technical perspective of exchanges, there is no substantial difference. Adding a new asset class usually does not require complex development; it can simply be supported on the existing chain. Currently, most RWA projects do not require independent blockchains; they are more often based on public chains like Ethereum, BNB, or Solana to issue tokens, making support at the wallet and exchange levels very easy. The real difference lies in compliance: which regulatory agency you need to apply for a license from and whether you can get approval. Once the licensing issue is resolved, there are almost no technical barriers.
In the long run, future exchanges should achieve unified trading of various global assets, whether it is a building, future IP rights of a celebrity, or even personal net worth, all can circulate in the same market. This not only maximizes liquidity but also makes the price discovery mechanism more efficient.
Of course, RWA also presents some unique challenges. For example, when you tokenize a building, if you later want to sell it, you may only be able to sell a portion. Because once tokens are issued, if an investor holds just one unit of the asset and refuses to sell, you cannot fully repurchase the entire building or incur huge costs. This can be understood as the concept of "on-chain squatters."
Although the realization of "global asset tokenization" still requires time, it is not out of reach for 90% of the countries in the world. Compared to some countries with extremely complex regulatory systems, many countries are more likely to directly adopt unified international standards, thus taking the lead in promoting global asset tokenization and free circulation.
Thoughts on Hong Kong's Path to Developing a World-Class Exchange
When discussing how Hong Kong can build a world-class exchange, I can analyze it from a logical perspective. Many countries or regions, in the early stages of crypto industry regulation, often choose strict controls to reduce risks and ensure safety. Regulatory authorities are concerned about making mistakes, so they usually require all businesses to operate locally: local licenses, local offices, local employees, local compliance departments, local servers, local data storage, local matching engines, local user bases, and completely independent local wallet infrastructure, etc.
This idea is relatively easy to implement in the traditional physical world, such as controlling through safes and physical isolation. However, in the digital currency industry, this distinction is not very meaningful. Whether the servers are located in Hong Kong, Singapore, or the US, the likelihood of being hacked is the same because everything operates online.
More importantly, if operations are to be segmented, building a secure wallet infrastructure alone often requires an investment of around $1 billion. Moreover, the issue is not just about funding; it is also about the shortage of talent—you can hardly recruit hundreds of top global security experts to build this foundational system. The cost of replicating a complete system is essentially equivalent to establishing a first-class international exchange.
From a liquidity perspective, if only local residents are allowed to trade, taking Hong Kong as an example, with a population of 8 million, or a small country with an active user base of 200,000 to 300,000, it simply cannot generate sufficient trading volume. Without liquidity, price fluctuations will be very severe, which is actually harmful to users.
Real user protection comes from a sufficiently deep order pool—when there are large orders in the hundreds of millions, prices will not be broken; when futures prices fluctuate, the market's liquidity is sufficient, so there is no need for forced liquidation. Buying 10 Bitcoins on a low-liquidity exchange will incur significant price slippage, and users will also bear higher costs. Therefore, large global exchanges can provide the most basic user protection—reducing users' trading costs.
When countries attempt to establish independent systems, it will inevitably lead to complex management challenges, which is not commercially viable. At the same time, many countries impose restrictions on tradable assets; for example, Hong Kong currently has many restrictions on listed currencies, and the product coverage is limited. As far as I know, most licensed exchanges in Hong Kong are currently operating at a loss; although they can maintain this in the short term, this loss model is difficult to sustain in the long term.
However, Hong Kong also has its advantages—Hong Kong's pace of improvement is very fast. We saw Hong Kong launch a new stablecoin draft in May, even earlier than the US. The government is very proactive in communicating with industry participants, including dialogues with insiders like us. Hong Kong may have been relatively conservative in previous years, which is completely understandable, but with the changing global situation, Hong Kong is now showing a very proactive attitude.
I believe this is a very good starting point. Past restrictions do not mean that the future will always be limited; rather, now is an excellent opportunity to explore. This is precisely why many Web 3.0 practitioners, including myself, choose to explore opportunities in Hong Kong.
Future Trends of Decentralized Exchanges
I believe that in the future, decentralized exchanges will definitely be larger than centralized exchanges. Although Binance may be large now, I do not think it will always maintain the largest position.
Decentralized exchanges currently have no KYC requirements, making them very convenient and quick for users who know how to use wallets, and they offer high transparency—although sometimes overly transparent, as everyone can see other people's orders.
・From a regulatory perspective, we have paid a high price for not doing KYC well at centralized exchanges. However, currently, the US seems to have little regulatory measures for DeFi, which may bring regulatory dividends for DeFi. But due to historical reasons, I personally find it difficult to try this field again.
・From a user experience perspective, the user experience of decentralized exchanges is still good, but users need to understand how to use wallets. In fact, those who used centralized exchanges in the past are well aware that the user experience is not ideal. The interface is filled with addresses, contracts, and other numbers and "garbled text," and the operation process often requires frequent checks of the block explorer, as well as guarding against various detail issues like MEV attacks. I have also encountered attacks multiple times while learning.
Therefore, for users who have just transitioned from Web 2.0 to Web 3.0, most will still choose centralized exchanges because the login method using email and password and the customer service support model make them feel more accustomed. However, as time goes on, when some users become familiar with wallets, they may turn to decentralized exchanges. Currently, the fees on decentralized exchanges are actually higher than those on centralized exchanges, but in the long run, with technological advancements, the costs of decentralized exchanges should become cheaper.
Many decentralized exchanges now have their own token incentive mechanisms, incentivizing through token issuance. However, this incentive will eventually disappear because tokens cannot be issued indefinitely—unlimited issuance will lead to a decline in the price of existing tokens.
Therefore, the current market is still in a relatively early stage, with these token incentives still in place. But in the long run, I believe that in 5 to 10 years, decentralized exchanges will become very large. I believe that in 10 to 20 years, the scale of decentralized exchanges will definitely surpass that of centralized exchanges; this is the future trend.
Although I will not lead related projects again, from an investment perspective, we have invested in many similar projects, but all are small stakes, and we are now providing support from behind. I believe there is still considerable development space in this field.

Zhao Changpeng (CZ) on Crypto Asset Treasury Strategy (DAT): A Bridge for Traditional Investors to Enter the Crypto World

Many people often oversimplify the concept of DAT (Crypto Asset Treasury Strategy), but in fact, this track is highly segmented. Ultimately, its core logic is to package digital currencies in a stock-like manner, allowing traditional stock investors to conveniently participate in investments.
The DAT field has various levels and forms, just like traditional companies, where various models can coexist. Crypto ETFs are mainly issued in the US, but many investors lack US stock accounts or are unwilling to bear the high trading and management costs. In contrast, listed companies like Strategy, which directly hold digital currencies, can often achieve asset allocation at a lower cost. At the same time, their financing methods are more diverse, allowing fundraising in different markets such as the US, Hong Kong, and Japan. The differences in financing channels and investor structures among listed companies in different regions also shape their unique market patterns.

In the listed company model, DAT companies mainly have the following operational modes:
1. Passive Single Asset Holding Model
Represented by Strategy, focusing on passive holding of a single asset, Bitcoin. This model is relatively simple, with low management and decision-making costs, allowing it to stick to a set strategy regardless of Bitcoin's price fluctuations.
2. Active Single Asset Trading Model
Although it also holds only one type of coin, the management strategy is entirely different. These companies will attempt to judge price movements for active trading, which requires assessing the trading capabilities of the managers. Because it involves subjective judgment factors, the results of this model can be positive or negative.
3. Multi-Asset Portfolio Management Model
More complex DAT companies hold various digital currencies. Managers need to make complex decisions: how much Bitcoin to hold, how much BNB, how much Ethereum, etc., how often to adjust this investment portfolio, and when to adjust it, all of which test the managers' capabilities.
4. Ecological Investment Construction Model
This is the most complex model; in addition to holding coins, it will also allocate 10%, 20%, or more of funds for ecological construction. For example, a company focused on Ethereum may wish to invest to help the overall development of the Ethereum ecosystem; this model is more interesting. Projects like BNB that support other digital asset ecosystems also have similar practices, but this places higher demands on management capabilities.
Therefore, DAT is not just about "holding coins"; different models correspond to different management costs and requirements.
The DAT companies we currently support tend to favor the simplest first form. We prefer companies that focus solely on a single asset, especially BNB, because the judgment is easier, and there is no need to participate too much in daily management. In a bull market, listed companies generally benefit, but in a bear market, especially in the US, companies often face lawsuits. If the strategy is clear and simple enough, the risk of litigation will be relatively reduced, and the company's legal costs can also decrease—after all, lawsuits are extremely expensive.
Our goal is to minimize operational costs while promoting the concept of long-term holding. We do not want companies to use funds for additional investments; instead, we hope they can participate more deeply in supporting ecological development.
The significant meaning of the DAT model lies in that many companies' finance departments, listed companies, and even state-owned enterprises cannot directly buy digital currencies, but through the DAT model, we can actually allow these traditional investors to gain exposure to digital currencies. This group is actually a very large market, much larger than the crypto circle.
In the DAT projects we participate in, we usually play a role as small supporters. Most of the funding for these projects comes from traditional stock markets or other channels, which greatly helps our ecological development and drives many groups outside the crypto circle to purchase digital currencies.
We generally do not take the lead or manage these companies; instead, we seek suitable managers through ecology and networks. Managing listed companies is not our expertise, but many people in the industry have relevant experience, and we prefer to collaborate with them to leverage synergies.

The Integration of AI and Web 3.0: The Inevitable Path from Concept to Reality

Frankly speaking, the combination of AI and Web 3.0 is still not ideal at present. However, I believe this trend is not merely a conceptual hype but an inevitable trend that will lead to breakthrough developments in the future. A few months ago, I posed a question: What currency will AI use? The answer is obviously not the US dollar or traditional payment systems, as AI cannot complete KYC. The currency system for AI must be based on digital currencies and blockchain, enabling payments through API calls or broadcasting transactions.
This means that the transaction volume on the blockchain will experience exponential growth. In the future, everyone may have hundreds or thousands of AI agents handling tasks like video production, multilingual translation, content distribution, booking, and message replies in the background. Their frequent interactions will generate massive micro-payments, and the volume of crypto finance transactions is conservatively estimated to increase by thousands of times. For example, a blogger can set the first third of an article to be free, charging only 0.1 yuan for each reading of the remaining two-thirds. If hundreds of thousands pay, they can earn tens of thousands of yuan—this model is not achievable under the traditional financial system but can be easily supported through the integration of AI and Web 3.0.
Transactions will also become more global. I can simultaneously hire engineers and designers from China, India, and around the world, and AI will automatically handle settlement and payments. However, most so-called "AI agents" in the Web 3.0 field are still stuck in the pseudo-product stage of Memecoin: the front end displays some novel content, while the back end calls mature large model APIs like ChatGPT, lacking real utility. What we truly need are AI tools that can perform actual work and create economic value, and top large model companies are also striving to explore this direction.
However, the development of AI requires extremely large amounts of funding. The competition for computing power among large models is exceptionally fierce, and the costs are staggering. It is reported that OpenAI currently has about 1-2 PB of computing power, with annual costs of around $6.5 billion per PB, and its expansion plan is to scale by 10 to 100 times—this investment will be astronomical, not including chip expenses. No VC, company, or even country can bear such a massive financial burden alone, which is why the AI industry has begun to explore new financing paths through the lens of Web 3.0.
Fundamentally, AI should be viewed as a public good. Currently, many large models are overly closed. Allowing token holders to share in the profits and making the models more open-source, decentralized, and accessible to all may be a more reasonable development direction. I have discussed this with several top large model founders. Although everything is still in its early stages, this trend will inevitably come.
Despite the current imperfections in the integration of AI and Web 3.0, its future development prospects remain highly anticipated.