Zhao considers centralized exchanges can help people train and have the tools necessary to invest more consciously before unavoidably turning to DeFi. The CEO of Binance thinks technological innovation will allow users to conduct their transactions as they have complete control over their wallets.
Changpeng Zhao is the CEO of Binance, a centralized exchange, but he thinks DeFi will be the future of the digital asset sector.
In 2020, Zhao already discussed decentralized finance when Binance Smart Chain emerged. He recognized that specialized DeFi exchanges, like Uniswap and Curve, might eventually cause difficulties to centralized platforms like his.
In an interview, the Chinese-Canadian programmer pointed out that they do not plan to build a CeFi exchange. Zhao also said Binance could still benefit from its BNB token holdings if decentralization became the dominant business model.
However, he now seems not to have any doubts, as he stated that he is sure that DeFi will determine the future in the sector.
Zhao commented that centralized exchanges would now serve as a ramp to crypto for consumers unfamiliar with blockchain technology. However, he highlighted that they would move toward DeFi once they become more familiar with it, which might take a few more years.
Zhao Thinks Cryptocurrency Exchanges Are Crucial for the Development of DeFi
The CEO of Binance said that people are still not very familiar with cryptocurrencies and digital assets in general. Therefore, he thinks centralized exchanges can initially help them train and have the tools necessary to invest more consciously before unavoidably turning to DeFi.
Zhao thinks DeFi represents an evolution of digital finance and an adaptation to decentralized blockchain technology. He describes it as a financial system that does not depend on central financial intermediaries like brokers, exchanges, or banks.
In addition, Zhao highlighted that DeFi allows trading and services offered by traditional banks and financial institutions. These include earning interest, activating loans, lending, buying insurance policies, exchanging derivatives instruments, and exchanging resources. The difference is that this happens faster and does not require documentation or the intervention of third parties.
According to the CEO of Binance, DeFi exchanges will exceed centralized ones, like Binance, in volume and diffusion within ten years. However, Zhao also sees a future where the two systems may co-exist, as many people will continue to prefer more centralized exchanges.
The CEO of Binance Considers that DeFi Promotes Greater Inclusion
Zhao also said technological innovation linked to the development of DeFi facilitates the task of users, making these tools increasingly attractive. He thinks it will allow users to process their transactions as they will have complete control over their wallets.
Zhao also spoke about the decision by the European Union regarding the MiCA regulation approved in July. It should be fully operational in 2023, not to limit the role of stablecoins and the PoW system regulating Bitcoin.
Changpeng Zhao also tweeted that the liquidity that stablecoins guarantee to markets is essential to protect cryptocurrency users. Although the founder of Binance considers the new law on crypto regulation from the European Union helpful, he finds it too restrictive.
By Alexander Salazar