CZ’s Full Davos Dialogue: Bullish on Tokenization, Payments, and Artificial Intelligence
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CZ’s Full Davos Dialogue: Bullish on Tokenization, Payments, and Artificial Intelligence
All else being equal, faster and cheaper is always better.
Navigating Web3 tides with focused insightsCompiled by: CoolFish
Moderator: Over the past few days at this forum, I’ve sensed that two entirely distinct conversations have been unfolding here almost simultaneously. One centers on geopolitics and macroeconomics—discussions expressing concern over the fragmentation of the global trading system, mounting debt burdens, and the evolving role of the U.S. dollar. These conversations often feel deeply discouraging and anxiety-inducing. The other conversation focuses on artificial intelligence, innovation, and technology—vibrant dialogues about future possibilities, with numerous exciting technological breakthroughs already underway.
In today’s panel, we’ll attempt something bold: integrating these disparate conversations—not only exploring how innovation happens and what the future may hold, but also critically examining the regulatory and geopolitical context in which such innovation unfolds, and how that context shapes financial innovation.
We’re honored to welcome four outstanding guests. First is Steven van Rijswijk, CEO of ING Group from the Netherlands. Next is Jayee Koffey, Chief Enabling Officer and Global Head of Public Affairs at BNY Mellon in New York. Then we have Fred Hu, Founder, Chairman, and CEO of Primavera Capital Group from China. Finally, we welcome CZ—Changpeng Zhao, founder of Binance from the United Arab Emirates. We’ll refer to him as CZ for simplicity—and because I’d rather not stumble over his name repeatedly. CZ now speaks freely, and I’m confident he’ll deliver an especially compelling contribution.
The theme of today’s discussion is “How Technology Is Reshaping the Global Financial Landscape.” Those following this space will recognize that profound transformations are already underway: payment methods and monetary systems are undergoing radical change; the underlying infrastructure of financial transactions is rapidly evolving. These shifts are dizzying in their pace and scope. To open the discussion, I’ll ask each of you—in order of seating—what you see as the most far-reaching structural shift occurring today, and what development excites you most. It could be a specific market segment—private credit, investment, Bitcoin, stablecoins, central bank digital currencies (CBDCs); it could be a technical breakthrough—such as Bitcoin’s ledger technology; or it could be an infrastructural innovation. The scope is entirely open—please speak freely. Tell us which exciting new developments you believe will have the deepest impact on finance.
CZ: Absolutely. I focus on a very narrow slice of financial markets—primarily cryptocurrencies, blockchain, and Web3—call it what you will. I’m convinced this technology is a true game-changer. And I believe we’ve already demonstrated over the past 15 or 16 years that it’s here to stay.
Binance is one of the world’s largest cryptocurrency exchanges.
Fred Hu: It *is*, in fact, the largest.
CZ: Yes—it’s currently the largest, with scale exceeding the combined size of the top five exchanges. But consider some data points: Binance serves 300 million users. That likely makes it larger than any bank I know of. Its trading volume not only surpasses the Shanghai Stock Exchange—but last year, exceeded that of the New York Stock Exchange. Yet, within crypto today, only two sectors have truly matured into robust industries: exchanges and stablecoins—both massive commercial ecosystems.
I’m particularly excited about three emerging areas. First is tokenization—a massive opportunity. I’m currently in discussions with over a dozen governments on asset tokenization strategies, where governments can generate early financial returns and catalyze upgrades across mining, trading, and other sectors.
Second is payments—we’ve tried, but haven’t yet cracked it. To be precise, cryptocurrencies haven’t meaningfully entered the payments space. We’ve experimented, but no one is actually paying with crypto yet. Now, however, we’re seeing traditional payment rails quietly converge with crypto infrastructure: when consumers swipe their cards, crypto is automatically deducted from their wallet, while merchants receive settlement in fiat—USD, EUR, etc. Once those bridges are built, payments will undergo a major transformation.
The third area—already highlighted by others—is artificial intelligence. The native currency of AI agents will be cryptocurrency.
Blockchain will become the most natural technical interface for AI agents. Today’s AI still falls far short of intelligent agency—it can’t book your flight or pay for your lunch. But once it reaches that level, all payments will flow through cryptocurrency.
Moderator: That’s the optimistic scenario—the thrilling part. Now I’d like to pivot and reflect on a recurring reality of any era marked by innovation and experimentation: some attempts succeed, others fail. So let’s explore what might *not* work. Ten years from now, if we’re sitting on this same panel at Davos, which of today’s discussed developments might not even merit mention—perhaps already abandoned? Let me offer a few starting points. You’re all excited about AI—but MIT research shows AI, while fast, often produces mediocre output. They call it “work slop.”
You might achieve ~80% accuracy—if that’s acceptable, AI is fantastic. But if you demand excellence—if failure is unacceptable—AI faces real limits. Another example is Bitcoin experiments. El Salvador worked hard to adopt Bitcoin. On paper, it made perfect sense: El Salvador relies heavily on remittances and lacks its own stable currency. Bitcoin seemed ideal for remittances—cutting costs dramatically. Yet despite massive marketing and resource investment, actual adoption remains near zero. These are just illustrative examples of potential limitations—food for thought.
Let’s continue—same speaking order. What’s generating excitement today—or at least enthusiasm among some—that you believe won’t even be discussed ten years from now? CZ, what should we be wary of today? Or where should capital *not* flow?
CZ: Absolutely. I suspect my three fellow panelists are all highly measured—and politically correct. I’ll give a more direct answer, one that may offend many—including people in my own industry. I do agree with Stephen’s earlier point: if you’d asked me this question ten years ago, I’d have said Bitcoin payments. But today, a decade later, we’re still nowhere close. So I remain skeptical about payments.
We’re trying. The entire industry is investing heavily in payment projects. But every innovative field carries an extremely high failure rate—while the few successes scale exponentially, right? I also share Stephen’s view on the metaverse. Well, we saw NFTs explode in popularity—and then fade dramatically. I have a strong hunch memes may follow a similar trajectory. I could be wrong.
Many in crypto will hate me for saying this. But you know, in highly speculative new domains, risk is exceptionally high. Building real utility is difficult. Some meme coins *have* endured—Dogecoin, for instance, has existed for roughly 15 years. So culturally resonant projects may persist. But I believe most meme coins won’t last. One final point—though it may offend other industries—I expect physical banks to shrink significantly over the next decade.
Fred Hu: Shrink?
CZ: Yes—shrink. Demand for physical bank branches will decline sharply. ING pioneered online banking—25 years ago. Replacing entrenched industries takes time. But today we have crypto and blockchain. Electronic KYC (eKYC) and e-everything already meet core financial service needs—reducing the necessity of physical branches.
I don’t think banks will disappear. They perform critical—and multiple—essential functions. But all industries—emerging or traditional—face risk. We must regularly reassess market dynamics with care.
Fred Hu: But you’ve only told us what failed over the past decade. You haven’t yet told us what will fail in ten years.
CZ: Essentially, I’m saying memes look high-risk. Physical banks look high-risk. I could go on—but then I’d offend even more people.
Guest: Yeah.
Moderator: No—I think your last point is vital. Let’s unpack banks further. If macroeconomists joined this discussion, they’d highlight risks facing banks. Even as funds flow through alternative channels and mechanisms, banks remain the key financing source for investment and growth—especially for SMEs, notably across Europe, though significance varies globally. Yet if new financial models emerge, banks’ roles may diminish, shifting funding flows elsewhere. So I’d especially like you to elaborate on those risks.
Another major risk macroeconomists and finance experts watch closely is systemic financial market risk. Everything moves faster now. Last week, I attended a workshop on AI and algorithmic trading risks in financial markets. Indeed, event velocity has accelerated dramatically. For me, the Silicon Valley Bank (SVB) collapse served as an early warning—even before many of the innovations you’re discussing took hold. At SVB, we witnessed the fastest bank failure ever recorded—far quicker than the two major U.S. bank failures during the peak of the 2008 global financial crisis (Washington Mutual). Those banks experienced runs lasting two to three weeks before collapsing, losing only ~10–15% of deposits. SVB lost 80–90% of its deposits in just one or two days. Speed had fundamentally shifted. More strikingly, this crisis wasn’t triggered by AI, Bitcoin, or other emerging technologies—it was sparked simply by online chatter.
People no longer need to gather in cafés to exchange news and rumors. And with new technologies, they can withdraw funds directly from online accounts—no queues required. In a sense, that’s *older* technology compared to what you’re discussing—yet it already transformed the speed of bank runs. When you consider broader market implications, you see amplified momentum trading. When everyone uses identical algorithms—and AI executes trades faster than humans can hit a button—losses deepen, volatility spikes, and cascading risks multiply. How concerned should we be? Are there solutions?
CZ: Let me add a few points. I think this breaks down into several distinct issues. First, all else equal, faster and cheaper is always better. Speed itself doesn’t inherently create more risk—it merely exposes pre-existing vulnerabilities more quickly. If a bank operates on fractional reserves and lacks sufficient liquidity, faster withdrawals simply accelerate the revelation of that shortfall. Slowing things down wouldn’t solve the root problem—it would only trap consumers who couldn’t access funds when needed. So all else equal, cost-reducing, efficiency-enhancing technologies remain superior.
Regarding SVB, the rumor landscape felt markedly different in crypto circles. The bank might have been in trouble—or not. But our impression was that SVB was unusually crypto-friendly. It may have been shut down under “Operation Choke Point 2.0.”
Take Binance as another example: In December 2023—after FTX’s collapse, after Luna/UST’s implosion, and even after SVB’s failure—Binance processed $7 billion in single-day withdrawals. The system handled it flawlessly. That week, withdrawals were in the hundreds of millions, then $1 billion, then $1 billion again—then $7 billion—followed by $1 billion, $1 billion, and $1 billion. Total withdrawals that week reached $14 billion—yet the platform remained fully stable. In the banking system, I’m unaware of any bank capable of withstanding withdrawals of that magnitude.
A “bank run” stems fundamentally from the design flaw of fractional-reserve banking. Liquidity problems arise *because* of that structure. This is ultimately a systemic design issue—not an AI problem. That’s my view.
Of course, AI does pose risks of synchronized action. But I believe that’s just the tip of the iceberg—if we blame everything on AI, we’re oversimplifying.
Moderator: Okay—so I’m hearing distinct perspectives. The crux lies in settlement, risk management, and regulation—including reserve requirements. Some responsibilities fall to firms internally, but government regulation and national infrastructure development are equally indispensable. We’re exceptionally fortunate to host such a diverse expert panel—each of you operates globally, and your organizations are rooted in different nations: the Netherlands, the U.S., China, and the UAE. Could each of you comment on the importance of regulatory frameworks? I’ll begin with Fred. Specifically, different countries manage these risks differently. Fred, could you contrast approaches taken by China and the U.S.? How do governmental policies shape opportunities in each country?
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CZ: I see this differently, given our distinct industries. Personally, banking and securities regulation is already highly developed, mature, and remarkably consistent across countries. Of course, differences exist—but highlighting them may reflect a beginner’s oversimplification. Crypto regulation, however, is radically different—policies vary enormously worldwide. Frankly, Binance holds around 22–23 licenses globally, yet most countries still lack formal licensing regimes. We see rapid progress in the U.S., but it’s still ongoing, right?
On market structure, the GENIUS Act passed last year—just six or seven months ago. So this remains a work in progress. We also see forward-looking regulatory frameworks emerging in places like the UAE, Bahrain, Pakistan, and Kenya. We’re delighted to engage in advisory consultations with them—ensuring regulators at least maintain dialogue with industry participants.
I serve as a private advisor to several governments—though I’m neither a crypto expert nor a regulatory expert. I simply share the market participant’s perspective.
Additionally, key regulatory divergences exist—particularly around capital controls. Many countries restrict outbound fund transfers; exceeding thresholds constitutes money laundering or other serious violations (however defined). The U.S. has no such restrictions. Tax regimes also differ drastically—directly impacting financial regulation. For instance, if you buy Bitcoin and its price rises, should tax apply to unrealized gains—or only realized ones? And so on.
Clearer, more harmonized rules would significantly improve the landscape. Yet I doubt global regulators can achieve full harmonization—though it’s not impossible today. Different nations have different priorities, agendas, and considerations—making a unified global regulator extremely difficult. We’d certainly welcome one—especially if it established a positive, innovation-friendly framework. That would make life much easier for industry participants.
But frankly, logically, it *should* be possible—after all, crypto is fundamentally the same everywhere. We shouldn’t need to adapt it per jurisdiction. There *should* be a best-in-class framework we can implement universally. I’ve spent considerable time trying to define exactly what that is—and how to collaborate with different countries to realize it.
Moderator: Great to hear—and I agree. Launching a new global international organization or regulatory framework isn’t feasible right now. That would be an uphill battle. But that doesn’t mean we shouldn’t begin thinking—now—about what such a framework *would* look like, especially if a crisis or major financial collapse creates the opportunity. We’d want ideas and plans ready to deploy swiftly.
CZ: A relatively achievable step is a regulatory “passport”—where a license granted in one country is recognized by others. This requires only intergovernmental agreement among regulators. We’re already seeing related discussions. This step is most likely to materialize first. Creating new global regulators—or even forums—faces steep implementation hurdles and timeline challenges.
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