At the Token2049 conference in Dubai on April 30, Binance founder Changpeng Zhao (CZ) spoke with Raoul Pal in a fireside chat about how governments approach cryptocurrency, how AI will change the economy, and what countries need to do to keep up.
CZ reported that many countries are asking him for guidance on how to develop their own cryptocurrency systems, such as wallets, exchanges, and custody. However, he warned that developing completely localized systems is impractical or unsafe.
Cold wallets for securely storing cryptocurrency require about 15 trustworthy signers to sign any transaction. It is very difficult to find such trustworthy individuals who are not public, do not want more money, and live in different areas.
Exchanges and order books (where buy/sell orders are listed) should not be divided by country. CZ explained that if each country builds its own small trading platform, this would reduce liquidity (the ability to trade swiftly and fairly). During significant price volatility, this could cause even more chaos.
CZ encouraged governments to start buying cryptocurrency for reserves now rather than later, when prices may be higher.
He highlighted Bhutan as a positive example, a small country using surplus hydroelectric power to mine Bitcoin. Their king is forward-thinking, and Bhutan is currently using cryptocurrency to build wealth sustainably.
CZ advised countries to start with a small allocation, first using professional custody services and then moving to safer cold storage as holdings increase.
CZ also discussed how AI and cryptocurrency will work together in the future economy. CZ criticized the saturation of useless AI tokens, calling for AI agents with real utility that benefit users. He emphasized that in a future driven by AI, cryptocurrency will be the default currency, saying, "Currency for AI is cryptocurrency."
He discussed the challenges Binance faces in overcoming legal barriers with governments and agencies worldwide. CZ shared insights on how the exchange approaches these complex relationships, emphasizing the need for transparency and collaboration.
In summary, CZ urged countries to view cryptocurrency as a strategic asset rather than a technology experiment. By avoiding fragmented systems and preparing for an AI-driven future where cryptocurrency is the default currency, governments can position themselves as part of the new digital economy.