Binance CEO Changpeng ‘CZ‘ Zhao has made a bold prediction, stating that decentralized finance (DeFi) will surpass centralized finance (CeFi) in prominence within the next six years. In a statement celebrating Binance’s sixth anniversary on July 14, Zhao expressed his belief that DeFi activities will continue to accelerate as more individuals utilize DeFi products and directly engage with blockchain networks. He emphasized that DeFi has the potential to provide financial access to those who are excluded from traditional banking systems. Furthermore, Zhao pointed out that the recent surge in institutional interest in cryptocurrencies validates the industry and its underlying technology. He asserted that these institutional players could facilitate the adoption of crypto by diverting even a small percentage of their vast equity market holdings into the crypto market, thereby significantly expanding its size.
Despite recent regulatory challenges faced by Binance, Zhao stated that the exchange is prepared to cooperate with regulators. Over the past month, Binance has encountered increased regulatory scrutiny and faced investigations in various countries, including Australia, legal action from U.S. financial regulators, and its decision to exit certain European and Canadian markets. Zhao emphasized the importance of regulation, describing it as a cornerstone for a robust, safe, and secure crypto landscape. He highlighted Binance’s pro-regulation stance and its extensive efforts in compliance and regulatory matters, citing the exchange’s licenses and registrations in 17 countries as evidence of its commitment. Additionally, Zhao expressed optimism that regulatory clarity and the growth of regulated exchanges will continue, citing Ripple’s recent legal victory as a positive development for the industry.
Zhao also drew attention to Binance’s limited exposure to the market downturn experienced last year. He specifically mentioned the initial $3 million investment in Terra made by Binance in 2018, which reached a peak valuation of $1.6 billion in 2021 before collapsing to zero. Furthermore, he stated that Binance had no exposure to bankrupt crypto firms, including Three Arrows Capital, FTX crypto exchange, and crypto lenders Genesis and Celsius. Zhao also mentioned that Binance.US’s attempt to rescue bankrupt Voyager failed, despite the exchange’s $10 million deposit payment that was never returned.
Changpeng Zhao remains optimistic about the future of DeFi, predicting its increasing prominence over CeFi. He expressed Binance’s commitment to working with regulators, emphasized the importance of compliance and regulatory efforts, and highlighted the exchange’s minimal exposure to last year’s market downturn and bankrupt crypto firms.