Author: Wu Says Blockchain
During a Q&A session at the fifth anniversary of BNB Chain in Hong Kong, Binance founder CZ (Zhao Changpeng) discussed various cutting-edge topics in Web3 and fintech, including promotional strategies for institutional-level money market fund tokens, the impact of Hong Kong's financial policies on innovation, his recent areas of focus, as well as core issues such as RWA, blockchain application pathways, the migration of pricing power, obstacles to the tokenization of publicly traded company stocks, and challenges in the development of decentralized science (DeSci).
Statement: The content of this article reflects the personal views of the interviewee and does not represent the views of Wu Says. It does not endorse any tokens. Readers are advised to strictly comply with the laws and regulations of their location and not to engage in illegal financial activities.
How can institutional-level fund tokens bridge the gap between whitelists and the openness of DeFi?
CZ: This is a significant question, and I cannot guarantee that I will provide a standard answer. Different projects have different methods for acquiring users. Collaborating with large partners like China Merchants (such as China Merchants Bank, China Merchants Securities, etc.) is a good choice due to their strong brand power. The key lies in how to genuinely acquire users and how much effort the partner will invest in their ecosystem for you. Which entry points on the official website or app can users see you? How are offline outlets and stores displaying your offerings? These details of "exposure locations and depth" need to be specifically negotiated and implemented in the collaboration.
At the same time, how many Web3 native users you can bring to the partner is equally important. Everything still depends on product effectiveness and "product-market fit" (PMF); marketing is always secondary; the product must first be refined to the point where "users are willing to use it and stay." Taking lending products as an example, users often prioritize core indicators such as interest rates and liquidity—therefore, product strength must be up to par.
Overall, the market space is vast, and you are already aligning with very strong partners in the traditional financial sector. As long as you can continue to create real value and secure sufficient exposure and positioning within their ecosystem, the prospects are promising. I don't know much about the finer execution details, but it sounds like the direction is correct.
How will Hong Kong's financial policies shape the localized development of future technological innovation?
CZ: The success of a business in a region is closely related to the government's attitude. If the government is open and supportive of innovation, then innovation will naturally thrive. If a government chooses to be closed off, then most likely all industries will face restrictions. However, if the government's attitude is open, it is likely to be willing to support all industries.
I believe Web3 is an advanced industry that can integrate with new technologies like AI and biotech. Most of these new technologies are also supported by the government, and there will be interactions between industries. For example, AI development requires financial payments, and digital currency is essential. If a place lacks digital currency, it will be difficult for AI to promote the development of financial applications. Similarly, in biotechnology, without relying on AI, development will be very slow; without AI, biotechnology will also struggle to make progress. Blockchain and cryptocurrency can provide financing solutions for these industries.
Moreover, when it comes to data security and privacy issues, blockchain technology can offer many solutions. The impact of these new technologies is not limited to a single industry but can extend to others. Therefore, government support can help not only one industry but also promote the development of other industries. Smart governments are usually able to implement effective regulations that protect users while supporting innovation, which has a positive impact across various sectors.
We see that Hong Kong is very proactive in attracting foreign investment, technical talent, and the entry of entire industries, including AI and technology. Although Hong Kong may not have a particularly large advantage in the AI field due to its smaller population, which limits data availability, countries like China and the United States may have more advantages in this regard.
I also believe that AI is one of the key technology fields that major countries are competing for because its impact on the future is enormous. Over the past few decades, the internet, blockchain, and AI have been three significant technological breakthroughs, and AI is regarded as a crucial technology by many countries. In contrast, blockchain was initially not given much attention by many countries, but it is now receiving increasing focus because it relates to the future of monetary technology. I think Hong Kong is doing very well in this regard; the government is very supportive of innovation and welcomes new industries. Overall, Hong Kong's policy environment is particularly friendly to emerging industries, especially the Web3 and digital currency sectors. However, if mainland China also begins to support the development of digital currency and Web3, more talent may flow back to the mainland due to its larger market size. As a pilot city, Hong Kong can benefit significantly from this, so the current development in Hong Kong is indeed a great opportunity.
CZ shares whether there are any new areas of focus recently
CZ: I once tried to play with dogs on BSC, and during that time, I faced many challenges while learning how to operate; I felt that public learning was not very suitable. Later, I found that real-time learning was better; although the experience is somewhat different from traditional platforms, it is still quite fun. As for memecoins, I find them interesting, but I'm not sure how long they can last.
I have recently become very interested in RWA, which has great potential but also faces many challenges. Especially after assets are put on-chain, they may be classified as securities or commodities, each with corresponding compliance requirements. Additionally, liquidity and redemption issues are also challenges that plague this field. I find solving these problems very challenging and interesting. Recently, I have also spent a lot of time focusing on AI and biotechnology. These fields have significant future potential; personally, I may not directly participate in AI projects but will make investments in this area.
However, I have been traveling more for business recently, possibly because I was restricted in the U.S. for a while, and now I can finally move freely. Moreover, many senior leaders from various countries are willing to meet with me to discuss topics such as WEB3 regulation and how digital currency funds operate, and I am happy to help, so I have spent a lot of time on these matters. Due to my busy schedule, the number of my tweets has decreased; I generally tweet more when attending conferences.
Overall, my tweets and activities are quite spontaneous; my Twitter account is basically managed by myself, and the content I post is what I see and want to share. I will post more when I have time and less when I don't, so it is quite random. I have also discovered that there are many joys in life that I had not experienced before; I have recently become more fond of traveling and sports, such as skiing and other extreme sports. I can say that I enjoy anything that involves strapping my feet to a board and going downhill. I have had more time to enjoy these activities recently because I have always been fascinated by sports. Not long ago, I swallowed quite a bit of seawater while at sea, haha. I prefer sports that take place in natural environments with less infrastructure. In contrast, skiing is somewhat more dangerous for me: I have been skiing for over thirty years (growing up in Canada), and now it feels slow and not thrilling enough; if I go fast, a fall could be quite severe, and my back isn't great, so I'm more afraid of falling. Water sports are different—falling into the water generally isn't a big deal, so I prefer water surfing.
Should the future of blockchain focus on commodity settlement or be open to more individual participation?
CZ: I think this is a very good question. In the long run, it will ultimately move towards popularization, where any retail investor can participate, but this takes time. For anything to evolve from a trend to widespread acceptance and then further form sufficient liquidity, it requires the accumulation of a user base. Without users, there are no transactions; without transactions, there is no liquidity.
The same goes for digital assets. Initially, Bitcoin had very poor liquidity at the $1, $70, and $100 stages, with daily fluctuations of 60% being quite common due to the small number of participants. Today, there are more users, but overall it is still in the early stages. My understanding of "adoption" is roughly this: if you randomly select 100 people on the street, perhaps seven or eight of them have held digital assets; however, their total assets are not 100% allocated to digital assets. From the asset allocation perspective, the proportion of digital assets among those 100 randomly sampled individuals may be less than 1%. Therefore, it is still a relatively niche asset class.
Although it is frequently in the news and highly discussed, it remains a niche asset. Precisely because it is niche, we early practitioners have the opportunity to stand out. Unlike traditional finance, here we must build liquidity step by step and pragmatically—it is impossible to set everything up today and have trillions of dollars in transactions tomorrow. We must first look at how many real users there are and how much real liquidity exists, gradually connecting each link; therefore, early costs cannot be too high, and the pace must be controllable.
However, the current scale is far beyond what it was back then. In 2017, we saw Poloniex and Bittrex with daily trading volumes of about $200 million and transaction fees of around 2%; now it is in the tens of billions to hundreds of billions, and the size of teams and investments has also increased accordingly. Therefore, liquidity is built up "like building blocks": it must start small; you must first find your core users—even if it is just 10, 100, or 300 people—who are genuinely willing to trade on your product; deeply reach that small group of "right people," and then gradually expand; this is the most precise and effective approach.
In terms of pathways, in the short term, it is more likely to start with financial products that are standardized and easy to trade: this is why stablecoins are often included in RWA discussions, and the tokenization of securities and commodities is also receiving attention for this reason. Other types of assets will gradually follow. This will not happen just because BlackRock wants to launch a product; the market will not "use it all tomorrow." The larger the partner involved, the higher the user base and influence, but for startup platforms, it is crucial to have "correct expectations": doing it too early will be very difficult, and doing it too late will miss the opportunity window—at the right time, with the right investment, and gradually proceed.
Will the pricing power of RWA shift from traditional matching ends to on-chain?
CZ: Let me try to explain; I am not an expert. Traditional financial products are relatively easier to price, such as foreign exchange, interest rates, stocks, and commodities, which usually have a complete historical price and pricing framework. In contrast, historical transaction data for real estate in many countries is not comprehensive and varies in reliability; if it is more subjective assets like art, pricing becomes even more challenging. I believe that once RWA is truly operational, pricing power will gradually shift on-chain because on-chain transactions and liquidity are better.
We can imagine the scenario of stablecoins: when many countries issue stablecoins, existing foreign exchange (FX) transactions mostly still operate in an RFQ model through channels like Reuters and Bloomberg, which is overall not transparent. Once each fiat currency has a corresponding stablecoin, pricing should occur more on-chain because it is more transparent, real-time, and can be traded 24/7. Initially, trading volumes may be small, but they will gradually increase as people discover that on-chain trading is faster and more timely.
Moreover, large stablecoin transactions can already be completed through AMMs like Curve, with significant trading volumes; AMMs have developed in this way. Therefore, for other commodities—including real estate—and for some currently illiquid assets, future pricing power is also likely to shift on-chain. This is a mutually reinforcing process: it is not that once something is put on-chain, trading volumes will explode the next day, but once on-chain pricing is established, trading volumes will gradually increase.
Therefore, if I want to buy a house or a piece of land now but cannot access its historical prices, I would hesitate to make the purchase, and others would too. Only when there is sufficient historical pricing data, trends can be observed, and comparisons can be made (such as how much the adjacent land costs and how many transactions have occurred) will transactions proceed more smoothly. Once this data is put on-chain and querying becomes very easy, people will be more willing to trade, and transaction volumes will increase; as transaction volumes rise, government tax revenues will also increase; with improved liquidity, buying and selling will become easier, attracting more participants and creating a positive cycle.
At the same time, there is currently a significant data gap in this area. As RWA progresses, whoever establishes a solid data platform will see considerable traffic. I have previously given similar advice: focus on this data, as it will grow in tandem with industry development, and there is much room for action. The most common question people ask is, "How much is this thing?" However, many prices are not transparent and can even be quite random—for example, when you attend a trade show, the ticket price may vary for each person. If all these assets and prices are put on-chain, pricing will become more transparent. Therefore, there will be many opportunities for platforms centered around "data."
Why do publicly traded companies not directly issue "native on-chain stocks" but turn to third-party distribution agencies?
CZ: Let me first address a core question: why don't companies do it directly? I believe companies should do it directly, but the fundamental obstacle in reality is compliance—they are uncertain whether they can proceed. Most publicly traded companies are regulated by the securities regulatory commission, and if they issue a token themselves, tokenizing their stocks and trading them on-chain, it is unclear whether the regulatory commission will allow it, and the regulatory standards vary by country.
We have communicated with various departments in many countries: if a publicly traded company "sells stocks in another location," does it still legally count as securities? In most cases, direct issuance by the company would be classified as securities and should be subject to securities regulation; regulators also prefer that you issue in the securities market rather than issue tokens. Therefore, until regulations are clarified, companies typically cannot issue directly. Moreover, once classified as securities, any purchaser must undergo KYC, suitability assessments, anti-money laundering checks, etc., which prevents on-chain addresses or wallets from making direct purchases, as downloading a wallet on-chain does not require KYC. Additionally, there are often "accredited investor" requirements in most jurisdictions, which must also be considered. Furthermore, if a company issues tokens under the supervision of a regulatory body in one country, there are cross-border compliance issues regarding whether investors from other countries can participate in trading.
As a result, the common approach currently is the "intermediary model": companies first sell part of the assets to compliant intermediaries, who then issue tokens on-chain. At this point, the tokens do not directly represent the stocks themselves, and the issuers intend to create a legal distance from the underlying securities. This is also why many tokens currently lack dividend rights and voting rights—this is not ideal for users. The best scenario would be for companies to issue tokens directly, allowing investors to purchase freely according to the rules, but in reality, there are many compliance restrictions, necessitating a convoluted path. Because the chain is lengthened, users' interests in terms of efficiency and rights are affected.
Therefore, in the future, if done wisely—such as if Hong Kong clearly allows any publicly traded company to issue 5% of its shares in token form and launch them in batches—this would immediately become popular. On the other hand, many current stock tokens are not strictly anchored to the corresponding spot stock prices, leading to decoupling and often lower prices. When price discrepancies arise, there will naturally be "arbitrage" opportunities: buying tokens on the lower-priced side and then converting them back to the underlying stocks to sell on the higher-priced side. If such price discrepancies persist over the long term, it indicates that the product's redemption mechanism is not smooth, and "full coupling" has not yet been achieved. I am unsure whether this stems from compliance restrictions or other reasons, but some core product issues remain unresolved.
The most ideal situation would be for regulators to provide a clear framework, allowing any company that meets listing standards to issue tokens as long as they have sufficient information disclosure and audit reports, with global investors able to participate. From an interest perspective, which securities market wouldn't want people from around the world to buy their stocks? The U.S. is already advancing "securities tokenization," which means that soon global investors may be able to buy U.S. stocks directly; if Hong Kong does not follow suit, it will fall behind, and Japan will also suffer if it does not act. Ultimately, everyone should move towards this model. The key here is not the technology—issuing a token can be done with just a few lines of code—but how to adapt existing regulatory provisions to the new paradigm and make necessary adjustments. We are currently in an exploratory phase, and the boundaries of what can and cannot be done are gradually being clarified; the technology, users, and capital are already in place, and the real bottleneck mainly lies in regulatory implementation.
How can decentralized science break the mold: Why has the Web3 community not fully focused on DeSci?
CZ: Regarding DeSci (decentralized science), this concept is valid, and I believe it will eventually be realized. However, there will be many challenges in the implementation process. The biggest challenge is that the research cycle itself is very long: for example, developing a new drug or technology often takes years; meanwhile, many current Web3 users focus more on hourly returns and lack long-term patience, hoping to double their investment by tonight or else withdraw—there is a clear misalignment in expectations.
Theoretically, many excellent researchers or scientists do need financial support, and the amounts required for individual projects may not be very large; $100,000 to $200,000 could be sufficient. If the Web3 community can provide this type of early funding, and the project achieves results over a longer timeline (such as successful drug development) with substantial returns, and is willing to share a portion of future profits with token investors or holders, then this economic logic is entirely valid.
Personally, I am very eager to support thousands, tens of thousands, or even millions of independent researchers—some in schools, some in their small offices, or in their own small laboratories conducting experiments. However, the entire system has not yet formed a very strong framework. I think there are several projects currently working in this space, and we have invested in some of them. If they can capture one or two truly "hot" research projects, that would be enough. For a slightly larger example: if someone suddenly discovers a drug that can cure cancer, or at least is very effective against certain mechanisms of cancer, and manages to secure funding and advance through this method, then this industry will immediately become popular.
Currently, there is still a lack of a "headline-making" case, but I believe it will come eventually. Many people are trying, especially with the addition of AI, which can process vast amounts of biological science information using big data; large language models are indeed useful in medical data analysis. Therefore, if some innovations emerge here, and the costs of pharmaceutical research continue to decline, if a few key breakthroughs occur, I believe this field will open up. Overall, the main difficulty at present remains the long cycle.
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