- Binance CEO CZ is optimistic about the entry of crypto into the Hong Kong region.
- The total number of addresses on Binance’s BNB Chain hit the 280 million mark.
Diverting their focus from the prevailing volatility in the crypto market, Hong Kong (HK) is keenly advancing towards crypto and Web3 adoption. This is evident from the crypto regulatory actions and Web3-centric events scheduled in the region. On Wednesday, Binance CEO Changpeng Zhao (CZ) connected in a candid virtual interview at the Hong Kong Web3 Festival, signifying the future of centralized finance (CeFi).
The global macroeconomy — including the traditional financial markets and cryptocurrency market – underwent a tragic period in 2022. The crypto sector witnessed the deadly Terra Luna crash along with hacks, scams, and bankruptcies. One big bankruptcy disaster that shook the world was the fall of FTX, the second-largest CeFi-based crypto exchange after Binance. Since then, CeFi is tugged under a heavy weight of scrutiny and criticism.
CZ’s Comparison Between CeFi and DeFi
There was an emphasis on bringing out opinions pointing at “CeFi vs DeFi”. The event’s talk included questions about the security, trust and user experience that CeFi offers over DeFi and TradeFi.
But CZ asserted:
“CeFi is not against DeFi. Decentralized people in the decentralized industry, you shouldn’t be against anybody. The more people who use DeFi, the more people will use CeFi. It may not be the same group of guys, which is fine. I think we just got to collect and roll the industry together.”
Firstly, two aspects – security and transparency – were discussed. As per CZ opinions, security measures are salient to CeFi and DeFi. Hacks can be common in both sectors. But significantly, CeFi platforms promote transparency with the help of proof-of-reserves. He signified the role of PoR audits in clarifying the details of funds secured on the platform.
He highlighted:
“Binance does this. Our wallet addresses are pretty public. FTX, for example, their wallet addresses were never public.”
Blockchain technology underpins CeFi and DeFi and that is also why they are tagged as trustless sectors. He filtered out one fact – risks are everywhere in CeFi, DeFi and traditional finance such as banks. Also, he recommended users learn risk management
According to CZ, user experience on CeFi is more comfortable for most people. CeFi does Know Your Customer (KYC) whereas most web2-centric platforms don’t. The usage of email, password and customer support is simpler on CeFi. He stated, “if they lose the password, then they can call somebody to fix it for them after their communications.”With DeFi, users get to have more control and more autonomy. But security and support seem to lag behind.
When it comes to the trust aspect. Binance CEO broke it down into three layers reliance on technology, the platform’s nature and the user’s knowledge of risk management.
Binance CEO CZ’s Take on Crypto Adoption
A question was posted regarding what would be the actual triggers of mass crypto adoption. To which, CZ responded that triggers would change over different periods of time. ICOs gaining momentum and the rise of NFTs and cryptocurrencies fame during 2020-2021 included various factors for adoption.
For the present scenario, he said:
“Today, many governments trying to control crypto may actually be the trigger to make crypto grow”
Lastly, CZ highlighted that Binance’s primary motto is to aid everyone to access the evolving crypto ecosystem. Predominantly, according to his statement, the exchange is primed to enhance wallets. Wallets serve as fundamental resources for people to navigate in the crypto sector.
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