Changpeng Zhao, or 'CZ', needs no introduction. In just a few years, the boss of Binance, which claims more than 80 million customers worldwide, has established himself as a key figure in the ecosystem (and not just because he has 5.6 million followers on Twitter). While in Paris for PBWS, the Chinese billionaire gave us some time to talk about a number of subjects. An hour isn't enough time to cover everything, but The Big Whale managed to ask him plenty of questions. We obviously talked about Binance's ambitions in Europe and France. But that's not all. We also took the opportunity to talk to him about the future of the sector, what could prevent Europe from becoming a leader in Web3 (the banks take the cake) and also what's happening in China, a subject he never mentions...
THE BIG WHALE : An incubator at Station F, premises in Paris, dozens of new hires... You've 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've been talking to the government for months now to see how we can work together and assess how we can set up in the best possible conditions. It's taken a little time, but things are moving forward. I have to say that I'm very pleasantly surprised by the welcome, and above all 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. We just need a little time. First we talk, then we do things. We're currently in the phase where we're getting things done. 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 there, 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're doing it. This has a positive effect on everyone. And if things go well, Paris could become our European headquarters.
This isn't the first time you've hinted that Paris could be your European, or even global, headquarters... Is this realistic? You still don't have the status of Service Provider on Digital Assets (PSAN) issued by the Autorité des marchés financiers (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 powerhouses like Ledger whose wallets are among the products I use the most... As far as PSAN is concerned, 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...
According to our information, you have not applied for registration as a PSAN (dozens of players already have it), but you have applied directly for authorisation (which only Coinhouse has). Is this true?
The question is more for the AMF than for me: for my part, I naturally cannot comment at 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?
While France and Europe have plenty of strengths, they also still have some weak points, such as... banks. European banks are still very cautious about cryptos. It's complicated for companies to develop without access to bank financing or simply to open an account. Europe needs proactive banks to support and finance Web3 projects. And not just a few banks: they all need to be proactive, as if crypto companies were businesses like any others. This is the big difference with the United States and Asia, where they are now much more open. In the US, I know of at least a dozen 'pro-crypto' banks. I'm thinking in particular of Silvergate, Signature Bank, and some very large institutions such as Goldman Sachs and JP Morgan. In France, I'd be hard pressed to name one.
Do you think Europe could miss out on the shift to cryptos, to Web3?
I don't think so, but the risk for Europe is of still being behind the United States 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 the same as with the Internet! Tomorrow, cryptos and blockchain will be everywhere, just like the Internet. No one can stop this fundamental movement that is making it possible to bank people and finance businesses... Europe needs to support this revolution and educate people about these issues. We know that there have been scams and that there will continue to be scams, but there are so many positive aspects and so many good projects to finance... The major groups of tomorrow are in the process of being built. That's what we need to look at. Europe needs to regulate the sector, but without preventing it from developing, otherwise it will weaken itself and other countries and entrepreneurs will take the lead.
There's been a lot of talk about NFTs over the past year, what do you think?
It's an essential tool. We've been seeing it for months, the sector is taking off. Of course there is speculation, but that's not the main thing. The reality is that the idea of digital property is going to revolutionise every sector. We are in Paris, surely the city with the most museums and works of art. Today, museums only 'monetise' their works through physical visits. By using NFTs, they could do much more, such as create virtual collections and earn extra income...
And what do you think of the fact that El Salvador has made bitcoin its legal tender?
That's big news. I'm convinced that other countries will follow suit in the coming months. There are also companies 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 are going to change money and finance.
How do you see Binance in 10 years?
Binance was created to give people access to cryptocurrencies. That is its raison d'être. We also create products to enable our customers to benefit from this ecosystem. But it's hard to know where we'll be in 10 years' time (laughs). It's not impossible that most centralised platforms will be replaced by decentralised equivalents. Does that mean I should be worried? Not at all. Our role is to be the gateway to the crypto world. If users want to go to DEXs and store their cryptos themselves, that's a very good thing. I'm personally all for it.
Coinbase went public a year ago. Do you have any similar plans?
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 an objective 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 it be feasible in China?
It seems 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 on the part of Beijing?
I don't really know. What I do know is that I think China should change its policy. As I said, 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 place of residence is in Singapore, but I'm planning to spend some time in Paris this summer (laughs).
Have you been to China recently?
Not for years. Beijing doesn't look favourably on the crypto industry, so I keep a pretty 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 wouldn't talk about specific 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, the most important thing is to allow the most modest to be able to rise.
