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Binance CEO Changpeng “CZ” Zhao virtually attended a fireside chat hosted by HashKey Capital CEO Deng Chao at the Hong Kong Web3 Festival 2023. He discussed topics including the future of centralized finance (CeFi), asset security, and mass adoption in crypto and Web3.
CZ said he has visited Hong Kong many times before for business but could attend the inaugural Web3 event. However, he promises to attend the next events in-person in Hong Kong.
Binance CEO Thoughts and Insights of CeFi
When asked about his thoughts on security incidents in the CeFi space in recent years and measures to reduce such happening in the future. He said Binance is taking many measures such as improving infrastructure, proof of reserves, and using new technology to safeguard users’ crypto assets.
Studies have revealed that the majority of people are not able to secure even their keys properly, which makes them lose their crypto assets. He asserts CeFi and DeFi both have some minor issues, such as security issues with DeFi wallets.
Furthermore, he answered questions on building trust in CeFi companies, as well as managing shareholders’ trust. The trustless technology in most blockchains builds some trust in the users about safety and security.
CZ claims Binance has strong user trust as it is used by most people in the crypto community. Self-regulation is important, and even countries, banks, and companies have some risks.
Crypto exchanges can have a major role in providing user experience to increase Web3 onboarding. While some challenges such as user experience and KYC do exist in Web3 in comparison to Web2. People prefer to use CeFi due to simple features such as passwords. Binance keeps web3 security first and has worked continuously to improve user experience. The exchange is also using local government and vendor solutions to increase trust.
Can CeFi and DeFi Coexist?
Binance CEO argues CeFi is not against DeFi. While DeFi and CeFi have some differences, some centralization can co-exist in decentralized platforms. Binance is a bridge between both CeFi and DeFi, filling gaps with products and services. “There’s no competition, people can have different views of CeFi and DeFi.”
He said it’s difficult to predict the trigger that will lead to mass adoption in the next crypto and blockchain wave. The trigger for mass adoption changes over time, citing examples of ICOs in 2017 and NFTs in 2021.
CZ also highlighted the need for regulatory clarity, saying “using enforcement to control crypto is bad.” Regulators need to understand that crypto is different from banks, there are different types of crypto assets. It is crucial for regulators to have a deep understanding, but most don’t have crypto experience.
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