Why Banks Are Dying: Richard Teng on Crypto, AI & De-dollarisation

Why are the banks dying? This is the main question that emerges from Raj Shamani’s recent podcast with Binance CEO Richard Teng. The conversation took several routes, shining a light on the key aspects of the current economy and the blockchain infrastructure that could topple the old guard.

Richard Teng, with more than 30 years of experience in financial services and regulatory bodies, came across crypto in 2017.

What started as an initial interest then created a realization. Richard said that the deeper he dove in, the more he realized: “this is going to be the future of financial services, future of money.”

Now he stands as the CEO of Binance, the world’s largest crypto exchange. And the crux of his conversation during the podcast was simple: if one is to build a bank, a securities firm, or an asset manager from scratch today, with today’s tools and infrastructure, it would look nothing like the institutions that exist now.

“It will be something that’s totally different,” Teng said.

This article is the analysis of the conversation. Discover as this blockchain convo goes through depths of current issues like infrastructure inefficiency, current needs like financial inclusion, and AI’s role in determining the future of finance. It also ventures into transforming regulations, while shining a light on skeptics who became crypto believers, the kinds of scams users may come across and what builders of today must do to stand out.

The Infrastructure Problem: Why Legacy Banking Is Breaking

Legacy banking, unfortunately being the only form of banking for most people in the world, is described as a slow process, ripe with legal and technological bottlenecks.

Expensive Cross Border Payment

Money transfer issues exaggerate when cross-border is the requirement. It is bad enough that a standard cross-border bank transfer takes 2-3 days, but when one piles on the steep fees, which is 6-7% on remittances, traditional modes of transfer don’t portray a good picture.

Take India for instance, the country alone receives more than $100 billion in remittances annually. When one considers the 6-7% fees, it turns out to be $6-7 billion a year lost to charges. This is the same money that could otherwise go directly to families, vendors, and communities.

Teng then focused on how stablecoins and crypto provide a contrasting picture. Funds can reach the end recipient almost instantaneously, and at a fraction of the cost.

Another key attribute that fast transfer through crypto allows is “Capital Velocity.” Richard Teng says that the long settlement time it takes for the transfer is the time that can be used for more investment.

Hidden Risk of Business-Only Hours

Traditional markets operate on limited hours. Depending on the country, the working hours are 9-5 or 10-4.

The issue, however, lies with the market. What happens when a key news breaks after the market closes? In traditional markets, no one, be it trader, institution, or retail investors, can act.

Since the business is closed, they can’t open new positions, hedge, or offset risk. Waiting till the market opens is the only option remaining, and by then, all the opportunities are gone.

According to Richard Teng, this may seem innocuous at the start, but in the long run, the timing issue is a liquidity risk for institutions, corporates, and retail investors alike.

And then you have the cryptocurrency market. It has offered 24/7 trading from day one. As far as the real structural advantage of crypto goes, this is the first one.

Settlement Risk: T+2 vs. Atomic Settlement

There are global securities across the world that still only operate on T+2 settlement, which means trade date plus 2 days.

These two days create a window for significant counterparty and clearing risk to creep in.

Crypto, on the other hand, has changed gears, moving to “atomic settlement.” This method is instantaneous, all because the underlying technology removes the intermediary, offering direct settlement services.

With 24/7 trading and atomic settlement, crypto trading offers a method of risk management that legacy finance structurally cannot offer, no matter how good the risk management within the traditional financial system is.

But Systems Have Started to Adapt

Just because legacy systems have had flaws does not mean they are not receptive to change. Speed has become the currency, and business wants to have it. Even SWIFT, which is the backbone messaging system for global bank transfers, has opened its arms to blockchain, embracing stablecoins and RWAs.

Regulatory clarity has made it much easier for traditional institutions to become receptive towards stablecoins. The U.S. GENIUS Act has been the turning point in this regard. And with other countries introducing their own stablecoin legislation, the traditional ecosystem is transforming.

We have traditional banks that are now issuing their own stablecoins. Standard Chartered and HSBC, for instance, have gone as far as getting secured licenses in jurisdictions like Hong Kong to bolster crypto engagement on the platform.

The same shift is being witnessed in corporate treasuries too. Large multinational treasuries such as Australia, Europe, US, Asia, are moving hundreds of millions of dollars daily between regions using stablecoin/crypto rails specifically. Why is that? Because it has less capital tied up, offers greater efficiency, lower cost, and a sense of certainty for every vendor who was once worried about when the payment will land.

With a 25x growth in RWA tokenization in the last year, there is ample evidence that use cases are expanding well beyond simple crypto trading. And it is just the start, as Teng says,

“The script is just being written at this point in time.”

The Binance founder puts further emphasis on how Binance has become the nexus of this conversion, referring to the world’s largest exchange as a “financial super app,” a platform that goes beyond crypto to offer exposure to commodities, petrochemicals, precious metals, US stocks, and pre-IPO opportunities.

According to Richard, Binance’s innovation is part of its global mission: “freedom of money.” The mission is about a platform that does not stop its services at crypto, but serves all financial needs.

Financial Inclusion: The 1.4 Billion People Legacy Banking Left Behind

With over 30 years of experience in the industry, Teng notes that central bankers and financial institutions have discussed “greater financial inclusion” since day one of his career.

However, these talks have never been realized, as today 1.4 billion people across the globe still don’t have access to any proper payment system or banking system.

The Binance CEO’s diagnosis of this situation is simple: expensiveness.

He says that financial institutions have made accessibility to payment systems too expensive for a huge share of the world’s population.

The technology isn’t to blame here, the archaic cost/business-model is.

So Teng asks, “What’s the alternative? What’s the option?” His own answer can be summed in three sentences: “It is crypto. It is blockchain technology, it is Bitcoin.”

And the Binance CEO has lived experience to prove his rationale. In the podcast, he talked about travelling to the global south, the frontier markets, and the emerging spaces. People there thanked him directly, especially Binance, for it provided direct access to crypto.

Teng adds, “it improved their lives as a store of wealth for transferring value they did not have access to before.”

It takes the conversation back to India, where $6 to $7 billion is lost to charges. This is money meant for the loved ones. This is money meant for medical expenses. And this is money meant to bring families together. Legacy banking has left behind these people. Crypto can bring them together.

The Future of Banking, According to Teng

With the pace at which the financial world is changing, Richard Teng has made an interesting prediction. He says that the concept of a “banking institution” will look very different to future generations because a mobile wallet can do everything a bank account does today.

He then gave a dive into why he thinks so, which can be condensed into a simple explanation of how wallets work.

“Take salary for example,” he says, “it could arrive as stablecoins directly into a wallet on a monthly basis.” From that point, Teng says a mix of AI and blockchain could be used to pay bills, and even create a diversified portfolio across equities/commodities/credit.

A wallet’s single interface could manage all of these services, which is not possible for legacy systems right now.

In Binance’s case, the wallet holds upwards of 80% of the market share, which indicates that the tides are turning already.

Teng told the host in the podcast that if he was 18 today, he would have embraced the new technology fully. That said, a wallet is not a bank account. Richard Teng said that while “you don’t necessarily need a bank account, but you definitely need a wallet.”

Where AI And Crypto Converge

Crypto Is The “Natural Currency For AI”

The Binance CEO believes that agentic trade and agentic payments will grow prevalent in the future. Crypto and stablecoins will be “the natural currency for the AI generation,” he says.

His rationale is simple, but true.

“AI agents making frequent, small, automated transactions can’t use traditional card or banking rails since fees and settlement times are too costly in traditional systems and are too slow for large scale trading.”

With instantaneous transfers that cryptocurrencies or stablecoins enable, these assets could become the natural choice once agentic systems start to grow.

How Binance Is Applying AI Internally

Binance has embraced this agentic future already. Whereas on one hand, there is Binance AI Pro, which is a product that offers analytics, assessment tools, and trading capability, there is an anti-fraud infrastructure on another, which involves Binance running 100+ AI models dedicated purely to fraud/scam detection.

This system isn’t just for show either. Just last year, it helped more than 5.4 million users avoid close to $7 billion in potential scams.

And the way this anti-fraud system has been implemented is intuitive too. Whenever a user attempts a transfer that looks risky, the system uses human-like guardrails using terms like “Are you sure about this?” or “Who are you sending to?” before the transaction completes.

Beyond that, Teng also revealed that Binance has issued an organization-wide AI mandate. According to that, every business unit leader at Binance is required to learn to use AI to become more functionally effective.

The Optimism Isn’t Without Caution

While Teng’s advice in regards to AI is worth assessing, it is also important to know that not every AI tool is built the same way.

Testing is non-optional, analysing the tool’s track record is a must. It is only after taking these two steps and testing the agents using small amounts that users should consider allocating meaningful capital to it.

Scaling up is ambitious, but caution is critical. Starting small is recommended, and understanding the agent’s ups and downs is crucial.

And when testing, crucial it is to look beyond ideal scenarios. Testing across different market conditions shows how consolidated the agent is.

Regulation: The Ex-Regulator’s Case For “Smart” Rules

Richard Teng’s own past as a regulator came to light in this interview. His core philosophy in regards to regulation is simple: the easiest form of regulation is to regulate everything to zero risk. However, zero risk also means zero activity, which benefits no one.

The Binance CEO suggests that users should look beyond the zero-risk possibility, and instead opt for a more balanced, “smart regulation” that makes room for better risk management while creating conditions to push innovation.

Richard also showed his disdain for one dimensional regulation. According to him, rules that are purely focused on risk don’t support growth. And because of that, they undermine the very purpose of the legislation.

The Binance founder also unveiled that Binance is currently working with policymakers and regulators globally to help shape “smart regulations.” Binance has been reported to be the first global exchange to have secured a “home regulator,” which is in addition holding regulatory approvals in more than 20+ countries.

Binance’s Proof of Reserve: Holding Over $140 Billion of Customer’s Asset

Teng also talked to the host about Binance holding over $140 billion in customer assets at any given time. These assets are secured, according to the founder, through “Proof of Reserve.” The reserve is accessible at all times, per the claims, allowing customers to check on-chain whether funds really exist.

“Traditional financial institutions cannot afford this kind of verifiable transparency,” adds Richard. It is something unique to blockchain-based finance and may never be replicated by the traditional system.

CBDCs and De-Dollarisation Will Take Time

According to the Binance founder, Central Bank Digital Currencies are tools countries are exploring to mitigate the risks that might arrive by gaining independence from the dollar.

However, the rules to apply are still complex, and wrought with diplomatic red tape and the age of the infrastructure. Richard Teng says that whether these CBDC experiments prove transformational will completely depend on how they are implemented, and how the public takes to them.

Banning Crypto Means Getting Left Behind

Many countries across the world are pondering on the prospect of banning crypto. A move that, according to the Binance founder, is an exercise in futility, something that could push a country’s economy back.

His core argument is simple: the longer a country bans this technology, the further behind it falls in the broader value chain. In the end, such countries will lose their competitive edge.

The Binance founder likens the ban to moves made by countries in the past. Those that did not embrace the gunpowder, lost the war. He adds, “Every time a country shuts its borders… and doesn’t continue to embrace innovation… that’s a risk to the country.”

His alternative to banning crypto is simple: regulations. Putting guardrails in place to control the access and reach of the tech is much more valuable than just stopping it from existing.

From Skeptics To Believers

Cryptocurrency technology has transformed. Over time, it has become more inclusive, more regulated. But skeptics aren’t still willing to let go. Why?

“It is the lack of time spent in understanding the technology,” according to Richard Teng. He states that technology isn’t in the wrong here. Wrong are those who have not gotten to the depth of what the technology has to offer.

But those who have started to understand what it could provide have turned into believers.

The Binance founder talked about Larry Fink, the chief of BlackRock. Once a vocal critic of crypto, Fink has become one of its biggest supporters.

Jamie Dimon of JPMorgan is another old skeptic that Teng put his focus on. He was also one of the sharpest crypto critics, and someone who maintained their stance for 7 years.

But education happened and his understanding deepened to the point that JPMorgan is reportedly working with DBS on tokenized deposits.

At the end of the day, whether someone believes in crypto or not, comes down to how aware they are of the technology and how they engage with it. Understanding has opened the eyes of the biggest critics. Teng asks, “what does this trajectory suggest?”

Scams & Security: Addressing The Obvious Objection

Scams & Security: Addressing The Obvious Objection

Cryptocurrency scams were common in the past. But today, they have even expanded, spreading their versatility at the same pace as crypto technologies.

Is this a crypto-specific problem? Richard Teng says no.

According to the Binance founder, scammers and fraudsters have existed in financial services for a very long time.

To drive his point home, he talked about a press article that he read, which showed the rising wave of scam calls in Singapore, one of which involved impersonating Singapore’s Prime Minister to solicit bank transfers, leading to one person losing $4.9 million USD.

“Scams exist in any situation,” he concludes.

But to make users watchers aware, Richard Teng pulled from his experience as a regulator, and shone light on the key tactics that scammers use.

Sometimes, they are fear and urgency-led, which forces victims to act under the false impression that their accounts have been compromised.

Then there are greed tactics, which are often used to offer vehicles that are “too good to miss.” Binance has attempted to curtail these issues through AI fraud detection. With over 100 AI models, close to $7B in scams have been prevented so far.

But regardless of how many AI systems there are, nothing comes before user-vigilance. Richard Teng’s advice is a simple one in this case: don’t trust unsolicited investment tips or “guaranteed return” pitches at face value.

Richard Teng’s Advice For Builders

“Focus on understanding before building” is a single sentence summary of advice that Richard has for builders.

He said that underlying technology will keep evolving, sectors will shift, and new opportunities will. However, before grabbing any opportunity, what a builder needs is to spend time understanding the landscape and the technology.

Binance’s CEO’s core building principle revolves around creating something that provides users with real value and genuine utility.

Giving rationale behind his building principle, Richard Teng said that when people see projects that give them value and utility, they will keep using them. His final message in the podcast reflected this principle, “Build to create or enhance real value, not to chase hype.”

Conclusion

When Richard Teng said banks are dying, don’t take it literally. However, what is true is that the foundation is changing. Financial infrastructure is shifting and those who don’t adapt to this change will fall behind.

The traditional banking system worked once. But the age is digital now, and blockchain technology has turned speed into a default. So when there is infrastructure inefficiency and financial exclusion within traditional systems, it is time to rethink the paradigm. AI and blockchain topics have become more prevalent, smart regulation has become a hot trend, and institutional skeptics have turned into believers. All of this points to a new, wallet-centric, blockchain-based financial system running alongside the legacy one.