Changpeng Zhao, or "CZ", needs no introduction. In just a few years, the boss of Binance, who claims more than 80 million customers worldwide, has become a key figure in the ecosystem (and not only because he has 5.6 million followers on Twitter). While in Paris for the PBWS, the Chinese billionaire gave us some time to talk about a number of topics. One hour is not enough to talk about everything, but The Big Whale managed to ask him many questions. We obviously talked about Binance's ambitions in Europe and in France. But not only that. We also took the opportunity to talk to him about the future of the sector, about what could prevent Europe from becoming a leader in Web3 (the banks take the cake) and also about what is happening in China, a subject he never mentions...
THE BIG WHALE: An incubator at Station F, premises in Paris, dozens of hires... You just made a series of announcements at PBWS that show your ambitions in France. Why France and why now?
CZ: France is one of the countries in Europe on which we are betting the most. We have been discussing for months with the government to see how to work together, to evaluate how to set up in the best conditions. It has taken some time, but things are moving forward. I must say that I am very pleasantly surprised by the welcome, and especially the vision of Emmanuel Macron, who wants to make France a leading country in blockchain and cryptos.
You came to France six months ago without making any announcements. What has changed in the meantime?
Nothing has fundamentally changed. It just takes a little time. First we discuss, then we do things. Right now, we're in the phase where we're doing things. So we're going to set up an office in Paris and create a Web3 incubator at Station F. There's already a good ecosystem, with investors and engineers. You know, Binance is a very closely watched company. When we invest in a country, all the other players look at why we are doing it. It has a positive effect on everyone. And if things go well, Paris could become our European headquarters.
This is not the first time you have suggested that Paris could be your European or even global headquarters... Is this realistic? You still don't have the status of Digital Asset Service Provider (DASP) issued by the French Financial Markets Authority (AMF)...
I think you have one of the most advanced European countries on cryptos and blockchain. So it would make sense to make Paris one of our headquarters. France is clearly ahead of the game. You have a clear regulatory framework, an ecosystem with drivers like Ledger whose wallets are among the products I use the most... As for PSAN, things are moving forward. Very well indeed.
Is it a matter of days, weeks, months? It would be your "laxity" on the fight against money laundering that would pose a problem...
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Binance invests hundreds of millions of dollars each year in anti-money laundering efforts. Some press articles (Reuters, editor's note) have recently reported malfunctions in our system. This is not true and we hope that the AMF will be able to validate our file as soon as possible.
According to our information, you have not applied for registration as a PSAN (dozens of players already have it), but you have directly applied for approval (which only Coinhouse has). Is this true?
The question is more for the AMF than for me: for my part, I naturally cannot comment for the moment out of respect for the French authorities.
Despite its strengths, Europe does not appear to be a leader in the sector. How do you explain this?
If France and Europe have plenty of assets, they also still have some weak points like... banks. European banks are still very cautious about cryptos. It's complicated for companies to develop without having access to bank financing or simply to open an account. Europe needs to have proactive banks to support and finance Web3 projects. And not just a few banks: they all need to be, as if crypto companies were businesses like any other. This is the big difference with the US and Asia where they are now much more open. In the United States, I know of at least a dozen "pro-crypto" banks. I am thinking in particular of Silvergate, Signature Bank, or some very large institutions such as Goldman Sachs and JP Morgan. In France, I have trouble naming one.
Do you think that Europe could miss the turn of the cryptos, of the Web3?
I don't think so, but the risk for Europe is to still be behind the US and China. Cryptos are here to stay. The question is not whether or not to get hold of them, but rather how to get hold of them. It's exactly like the Internet! Tomorrow, cryptos and blockchain will be everywhere, just like the Internet. No one can stop this fundamental movement that allows people to bank and finance businesses... Europe must accompany this revolution, and educate people on these subjects. We know that there have been scams and that there will be more, but there are so many positive aspects and good projects to be financed... The big groups of tomorrow are being built. That's what we have to look at. Europe must regulate the sector, but without preventing it from developing, otherwise it will weaken itself and other countries and entrepreneurs will take the lead.
For the past year, there has been a lot of talk about NFTs, what do you think?
It's an essential tool. We have been seeing it for months, the sector is taking off. Of course there is speculation, but that's not the point. The reality is that the idea of digital ownership is going to disrupt all sectors. We are in Paris, surely the city where there are the most museums and works of art. Today, museums monetize their works only through physical visits. By using NFTs, they could do much more, like creating virtual collections and getting additional revenues...
And what do you think about El Salvador making bitcoin its legal tender?
This is a big piece of information. I'm sure other countries will follow suit in the coming months. Then there are the companies that are investing in cryptocurrencies. We've seen Tesla, MicroStrategy, Square and others. As soon as people understand Bitcoin, they understand that this is the future. Just like with the Internet in 1995. At the time, few had identified the impact of this technology. The Internet changed information and cryptos will change money and finance.
How do you see Binance in 10 years?
Binance was created to give people access to cryptocurrencies. That's what it's all about. We also create products to allow our customers to take advantage of this ecosystem. But it's hard to know where we will be in 10 years (laughs). It's not impossible that most centralized platforms will be replaced by decentralized equivalents. Does that mean I should be worried? Not at all. Our function is to be that gateway to the crypto world. If users want to go to DEX and store their cryptos themselves, that's a very good thing. I'm personally in favor of it.
Coinbase went public a year ago. Do you have similar projects?
The arrival of Coinbase was a very positive signal for the industry. It gave it a lot of credibility. We're obviously paying attention, we're watching, but it's not a goal in itself. You have to know why you're doing it, and where you're doing it. In the United States, in Europe, in Asia?
Would this be possible in China?
This sounds very complicated. China has banned crypto exchange platforms, as well as mining. It has become impossible to operate there, which limits the possibilities.
How do you explain this new policy from Beijing?
I'm not sure. What I do know is that I think China should shift its policy. As I told you, blockchain and cryptos are here to stay...
You travel a lot, where do you normally live?
I do travel a lot because the market is global. My home is in Singapore, but I plan to spend some time in Paris this summer (laughs).
Have you been to China recently?
Not for years. Beijing doesn't look favorably on the crypto industry, so I'm keeping a low profile.
Are you afraid of suffering the same fate as some Chinese entrepreneurs, such as Jack Ma (founder of Alibaba), who have been subject to heavy sanctions?
I won't talk about individual cases. On the overall situation, the Chinese government has already explained that it wants to reduce inequality in the country, which is a very good thing. I just wonder about the way. I think that in order to reduce inequality, we must above all allow the most modest to rise.