Binance's CZ on $14 Billion in Withdrawals, Crypto Regulation and Tokenization

One of the beauties of the internet is that

you can get enormous access to the smartest

people in the world. Recently, we saw Binance's

CZ sit down at Davos and he shared a couple

of very interesting things. The first is that

he says that Binance has been stress-tested

in a way that would take down traditional banks.

I found this very interesting. Take a listen

to what he said. Uh, in December 2022, in one

day, there was maximum withdrawal of 7 billion

US dollars equivalent of assets from Binance.com.

No issues. In that week, there was a few days

before that, it was up like, you know, a couple

hundred million, a billion, a billion, and then

7 billion, and then a billion, a billion, a

billion. In that week, total 14 billion US dollars

worth of assets got withdrawn from the platform.

No issues. In a bank, I don't... I don't know

of any bank that can handle that. Now the second

thing that CZ talked about on stage that I found

fascinating is that US regulation is needed,

and he actually wants to see a global playbook,

global regulation. Take a listen to why he thinks

that's important. The banking industry, the

securities industry, the regulations are highly

developed, highly mature, and they are highly

similar across countries. I know their differences.

This is probably a novice person looking at

a problem in a very simplistic way. Whereas

for crypto regulations, it's different... very

different in every country right now. Um, and

uh, to be honest, well, Binance has like what,

22, 23 licenses all around the world, uh, but

the majority countries don't have licensing

regimes today in the world. And we also see

US is progressing very quickly, but it's in

progress, right?

So the market structure... well, the Clarity

Bill, um, the Market Structure Bill, uh, the

MiCA was passed last year. So that's like, you

know, six, seven months ago. We think that,

uh, obviously, more clarity, more consistency

will be much, much better. But I don't think

a global regulator will... will... will work.

Uh, well, is impossible at this moment. Different

countries have different priorities, different

agendas, different, um, considerations. So a

global regulator will be quite difficult. Uh,

we would love to see it, especially if that

global regulator can put in a positive regulatory

framework that's relatively pro-innovation.

And that will make the industry players' jobs

a lot easier. But to be honest, logically, it

should be like that, right?

Because this... crypto is the same in every

country. Um, it doesn't change country to country.

So there should be a optimum framework that

we should be able to put in. So, um, I'm actually

working... spending a lot of my time trying

to figure out what that is and how to work with

different countries. Now, last but not least,

everyone wants to know, CZ, you're pretty wealthy,

you've been pretty successful. How do I make

money?

What themes should I be paying attention to?

CZ explains that in the crypto industry, exchanges

and stablecoins are two proven businesses. But

he's got idea for three new ones that are coming

down the pipe. Take a listen to what CZ thinks

here. But right now in the crypto space, there's

really two proven, uh, industries, like the

exchanges and stablecoins. Those are large businesses.

I'm really excited about three new more. Uh,

I think, uh, tokenization is a huge one. I'm

talking with probably a dozen governments about

tokenizing some of their assets, because this

way the government can actually realize the

financial pro... uh, financial gains first and

use that to develop those industries, extractions,

um, you know, uh, the... uh, the trading markets,

etc. Um, payments is something that we've tried,

have not really conquered in, uh, or have not

really started in crypto. We tried, but it doesn't...

nobody really pays in crypto. But I think now

we're seeing the convergence of traditional

payment methods being on the... behind the scenes

being supported by crypto. So the... the spender

swipe a card, crypto gets deducted from their

account. The merchants gets US dollars or Euros

or however... whatever they get. So now when

we have those bridges, I think payments is gonna

come pretty big. The third one is, uh, what

you guys all mentioned, is AI. Uh, the native

currency for AI agent is gonna be crypto. So

there you have it. Tokenization, payments, and

AI. Those are the three areas that CZ thinks

is going to be really, really powerful moving

forward. I don't disagree with them, and I think

that there's a lot of asymmetry in each one

of those areas. It's always great to hear somebody

who's so smart and successful up on stage explaining

exactly what's happening in the world. And CZ's

done a pretty good job building Binance. I think

that listening to these people is pretty helpful

when you're thinking about allocating capital

in your portfolio.