CZ talks to Circle: Since the dollar cannot be protected forever, we should embrace the future
Original compilation: kxp, Rhythm BlockBeats
A few days ago, CZ, the founder of Binance, was a guest on The Money Movement column of Circle CEO Jeremy Allaire, and had a conversation for nearly an hour. The two parties did not talk about stablecoins, but talked about the impact of blockchain on the world from a more macro perspective.
Since 2020, the world has changed as if Pandora's box has been opened. While we are paying attention to various track projects in the industry, it is also necessary to obtain information on macro development. Rhythm BlockBeats listened to and translated the dialogue between the two as follows, hoping to be helpful to readers.
Jeremy Allaire: Hello, I'm Jeremy Allaire, welcome to The Money Movement, looking forward to our conversation today. You are welcome, CZ.
CZ：It's a pleasure to be here and thank you for having me.
Jeremy: First of all, I would like to talk about the reasons why you chose this industry and your vision for the future. I think each of us has our own story. When we come to the Crypto market, we want to do something, such as establishing a new global financial system, a new economic system, or a new way of world economic activities. I would love to hear your opinion, what do you think Crypto will bring to the world? How will the world change due to the development of Crypto in the next ten years?
CZ：Fundamentally, I think of the Crypto blockchain as a new technology for creating a trusted ledger system. However, just like the first application of the Internet was only for information exchange, Crypto initially only had monetary properties. I think with Crypto we can improve our existing currencies and thus the financial sector and fintech. Our current currency system still has many flaws, and in my opinion, we need to improve the efficiency of transactions while ensuring compliance, security, and ease of use. Because, we need to advance the development of Crypto technology and provide people with the opportunity to use this new technology.
Jeremy: I'd love to hear your thoughts on the growing number of Crypto-native businesses and organizations. At present, the global economic activity system is basically established according to the laws of nation-states and the laws of transnational corporations. The blockchain public chain connects many isolated financial systems to facilitate people's bookkeeping and governance. As new ventures and projects develop, and Binance has played a very large role in supporting them, what do you think of these new organizational forms? How will the world change when people start using the blockchain to operate capital and perform labor?
CZ：The topic you mentioned is very interesting. Binance wanted to be a decentralized organization at the beginning, but it didn't quite do it. We don't call ourselves DAO or a certain company, because we think that after removing these artificial terms, our essence is a team, a group of people working together to complete tasks under the incentive system and mutual trust.
In terms of corporate form, Binance may be one of the first startups to have a presence in 180 different countries, largely thanks to the internet and blockchain. When we first started, we were only responsible for handling Crypto transactions, allowing people to deposit and withdraw through the blockchain here. The employment agreement we issue to employees is very straightforward, and its binding force mainly relies on mutual trust. It will explain the company shares or Token rewards they can get after completing their work.
As long as people have that trust, they no longer need a legal document. We don't need to have an actual company, an office, a headquarters, whatever traditional corporations have, to do our job well. But recently we have also made a centralized change, because when we want to contact the traditional financial system, they will ask us to provide licenses, registration information, and three years of financial statements of the company. While we don't really need these things, we do so to satisfy regulators.
Today, we can organize without traditional structures, because now you can use the blockchain to make payments. Then, in the next step, any type of organization, including nations and countries, can be organized in this way, and national taxation, public services, etc. can now also be constructed using blockchain technology.
Jeremy: I agree with you. After removing some unnecessary human factors, these new organizational forms will be able to operate in a more efficient manner, creating more jobs for the world and enhancing exchanges between people. . I believe that in the next five years, blockchain organizations will become the fastest growing organizational form in the world.
I know that Binance has spent a lot of time communicating with authorities, explaining the development of emerging technologies to them, and investing a lot of energy. When you travel around the world, what do you think about Crypto, can you tell us about it?
CZ：At present, there are still great differences in people's attitudes towards Crypto. Some people still think that Bitcoin is only used by big drug lords; while some people think that it is the future currency technology and the driving force of future financial technology. It is important for every economic sector. It matters - and that's what most people think these days.
Jeremy: People's attitude towards Crypto has changed a lot.
CZ：Yes, a lot has changed, and people in many places want to introduce Crypto into the local economy without annoying local authorities. Interestingly, however, the traditional financial industry is more resistant to this change because they need to protect existing banks and financial institutions. I went to Latin America last month and found that many countries there use US dollars, 30% of the population works in banks, and they have nothing to protect.
Yes.
CZ：Yes.
Jeremy: They would say, “Since this is a more advanced financial system, economic engine and capital market structure, why don’t we just bring it in?”
CZ：Crypto companies will bring more employment opportunities, and can also introduce other Crypto elements into the local economy, and also need to pay taxes. These companies can build a talent pool for the local area, which is very beneficial to the future development of the region's economy.
If you look at the richest people in the world today, 9 out of the top 10 are in the US and 8 are in internet companies: Google, Facebook, Tesla, Amazon. The United States has indeed contributed a lot to the development of the Internet, and the Internet knows no borders. Some companies provide good Internet infrastructure for the whole world. As the blockchain continues to develop, multiple blockchain companies will also provide people with a variety of tools. Many ambitious countries want to attract these companies, so there is bound to be competition. Authorities in various countries do not want to be the vanguard of taking risks, but they also do not want to be the last.
I chatted with my friend that day, and he said that he expected that in five to seven years, countries all over the world would adopt Crypto. But I retorted, "No, if no one has acted, it will take longer." Now some authorities have begun to act, so the United States, not to be outdone, issued an executive order a month ago. The UK now wants to be a Crypto hub, while El Salvador is way ahead in this regard. Crypto adoption is now less risky for any authority.
Jeremy: So, for the authorities of various countries, Crypto is no longer just a matter of regulatory risks, but a matter of opportunities. Over the years, I have spent a lot of time and energy telling White House officials about the changes in Crypto over the past nine years. Today, many countries are scrambling to start adopting digital currency because it is related to the national economy and competitive advantage. Authorities are now thinking about the role of stablecoins in the national financial system and have improved regulatory clarity, which is really a good thing.
At the same time, the geoeconomic structure of the world is also changing, and we are in it, witnessing the formation of a new order and pattern. In fact, some of them have been brewing for a long time, and many Bitcoin players have also seen these changes after the financial crisis. Not only that, the rise of China is also affecting the formation of the world pattern.
We call this new geopolitical configuration the new Cold War era. To some extent, digital currencies will play an important role in this restructuring. In the speech delivered by US Treasury Secretary Janet Yellen yesterday, she also talked about this issue, which greatly shows that the authority's attitude towards Crypto has changed a lot. After all, if I discussed this issue at an authoritative meeting seven or eight years ago, they would definitely kick me out and emphasize that American authorities would not consider adopting Crypto.
In your opinion, what role can Crypto play in maintaining global integration? Do you think that Crypto, blockchain and digital currency can help the world to achieve better integration in a sense.
CZ：I think it's a very interesting and delicate topic. The world is in a state of separation and reunion, and many different factions have emerged. Therefore, each country has different circumstances to consider. Currency is a very powerful tool for the authority of a country, because it will play a vital role in geopolitics. Great powers have this ambition, but it can also lead to conflicts, such as wars and sanctions, etc. .
The world pattern is moving toward fragmentation, so people began to use currency to expand their international influence. Slowly, people began to look for a neutral currency to use, which is Crypto. Bitcoin is very neutral, it does not belong to any country, it is limited in quantity and there is no inflation. Therefore, for companies that conduct global trade, using a neutral currency is the best solution in order not to be frozen by any country. Of course, there may be those who think that Crypto disempowers them, and while this is true to some extent, Crypto also provides people with a better alternative.
At present, the emergence of Crypto poses a threat to the influence of the US dollar in the world, so the United States will struggle with it for a long time in the future. However, the result of this is that although the US dollar can be protected to a certain extent, as time goes by, many countries will still accept Crypto. Therefore, since the dollar cannot be protected forever, it should embrace the future as soon as possible. Although the disruption of Crypto in many fields is not obvious yet, I believe that the development of blockchain in the future will have great prospects.
Jeremy: I think digital currency has become a strategic tool for the United States now. If the object of your conversation today is the US cabinet members, the Secretary of the Treasury, the Secretary of State, the Attorney General, and the director of the National Security Council, how would you convey to them the strategic significance of Crypto and the important role Binance will play in it?
CZ：I think the rationale for this is actually very simple. Suppose we go back to 50 or 100 years ago, you had the best army in the world, but at the same time airplanes were invented, would you choose to introduce airplanes or keep the original army size? In my opinion, you have to bring in aircraft, and while your army may seem dwarfed at first, the introduction of technology is always the number one priority. Any country or economy that does not embrace new technologies will be left behind.
However, there will always be some resistance when adopting new technology because it will put some pressure on existing organizational forms. The reason why the United States has mastered the Internet is because it has mastered the companies that provide Internet technology. It is the same now, and the United States should also accept companies that provide Crypto technology. Binance is one of them, we are one of the biggest players in this space. But now, the business of the US trading platform is still supported by banks.
Now, with the development of the ACH integration, we can debit the user's account every month. US authorities are quite cautious about derivatives, interest-bearing products, many newer forms of products. I think at this stage, American authorities should be concerned with two things - anti-terrorism and anti-money laundering. That's clear. In addition, we want to protect the interests of consumers by combating any criminal activities such as fraud, hacking, and illegal data fraud.
In addition, we should maximize the independent development of industry personnel, formulate favorable policies, and attract international and local players to join the industry. I think this is where Binance's strength lies, it's conceptually very simple, although in practice there are some small trade-offs to be made.
Jeremy: Thank you, CZ, it was a great conversation today, thanks for joining us.
CZ：Thank you for having me. I also want to say, thank you for everything you have done in the United States, and hope that we can also contribute more to the development of Crypto in the United States in the future.
Jeremy: We fully support it.
CZ：Thank you so much.
Jeremy: Thank you, CZ.
