The second day of Singapore Fintech Festival (SFF) proved to a wet dream come true for crypto degens. With Ethereum founder Vitalik Buterin leading the morning session in real life, crypto fanboys (and girls) were treated to none other than Binance founder CEO Changpeng Zhao to close the day.
Although only gracing the conference in virtual form, Zhao’s panel was as engaging and insightful as anticipated. Here’s what went down.
Moderated by Jo Yeo, head of payments development and data connectivity of MAS, Zhao participated in the 4:45pm SFF session titled “Stablecoins: The Future that is your Money” alongside Paxos co-founder Richmond Teo.
On the topic of regulation, Yeo posed whether a Jerry Maguire “show me the money” approach would be a good test of regulation. In response, Zhao said “show me the money is a very good mentality to have. There should be audits about reserves and stablecoins for any crypto business. I encourage all regulators to that much more heavily than they’re doing today.”
Despite being previously burned by local regulators – the exchange was forced to stop offering its services on binance.com to Singapore residents in 2021, and later closed its separate Singapore entity – Zhao went on to approve of Singapore’s strict stance against advertising crypto to retail investors. “I think front and centre for Singapore is retail access to crypto today is still somewhat restricted, which is not wrong. Different countries have different situations, different stances, so it is not wrong to take a very cautious step.”
“With Hong Kong opening up retail access, should Singapore reevaluate?” He poised. “Singapore does other things quite well, and so far it has protected consumers really, really well.”
Zhao then compared how neighbouring countries are faring, stating “India has a high tax situation which is probably going to kill the industry. Japan used to have very severe limits on which coins an exchange can list and that really reduced industry activity. They’re revising that now and will open it up.”
Zhao was asked about whether retail investors can learn by doing. “Education is super, super important,” Zhao responded. “With Binance Academy, Binance Masterclass, Binance Scholarship, Binance University Interns, we would love to be able to share [education] in Singapore.”
In terms of exposure, Zhao advised that new retail users should have less than 1% in crypto in their wallet. “There are a lot of things to learn. How do you secure your Exchange account? How do you secure your own wallet? Both of those things actually require practice. How do you send a transactio? So you should only start with a very small amount of money.”
Zhao went on further to say that even “for most people, I don’t recommend them having a large proportion of their portfolio in crypto, but they should have a little bit of exposure to just a little bit of exposure. And then this way, they can learn more about it. If you just view it as an investment asset, that’s a very limited view of what crypto blockchain is.”
CBDCs x Stablecoins
Zhao stated that he believes stablecoins and CBDCs will “coexeist for quite a while…Many people have a slightly simplistic view of CBDCs stablecoins and native cryptocurrencies like Bitcoin, Ethreum, etc. but they don’t really overlap.”
“CBDCs are going to have unlimited supply used for cross border transactions, and will require a lot of permissions to apply for and be granted by a central party. Whereas Bitcoin or stablecoins are much smoother,” he explained. “CBDCs will have a much higher forced adoption rate but governments may spend over two years to use sandboxes and build roadmaps. Stablecoins serve as an intermediary between native cryptocurrencies and fiat currencies.”
“Many, many people who are not in the industry think cryptocurrency is one thing, thinking that central bank digital currencies will just replace everything. That’s not how it works. When there’s a new internet copmany, it doesn’t erase all the other internet companies, it’s just a new use case.”
With great power comes great responsibility
When asked by an audience member “with great power comes great responsibility, what crypto companies can do better to be accountable to enterprises?” Zhao highlighted that “security is number one.”
“On top of that is sustainability. If a business cannot sustain themselves, then they dig into user funds, customers, and other pockets that causes all kinds of problems. So you actually want to use a platform that’s profitable, and that’s sustainable, long term even in bear markets.”
Zhao further added that “Transparency is very important. So we need to be transparent about how we make decisions, how we do things, history, credibility, how do we protect users. We need to be very collaborative, both with users and also with regulators, governments all around the world, we can’t be fighting people, right? This is a new industry, we need support from everybody.”
Finally, when asked what was on the top of his wishlist for 2023, Zhao said “I just want to be invited again to this conference and would love to see more retail access allowed to Singapore and would love to get a license in Singapore!”