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Why Banks Are Dying: Bitcoin, Crypto & De-dollarisation Explained | Richard Teng | FO529 Raj Shamani — Transcript

by Raj Shamani · 7,788 words · 1,370 segments · language en · Watch on YouTube

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0:00What if some people come together and
0:02decide they want to ban crypto?
0:03>> It's not something that you'll be able
0:05to ban. It has now gone into mass
0:07adoption. It's a mode in [music] which
0:09future financial infrastructure is being
0:11built.
0:13>> Warren Buffett, [music] he's been very
0:14vocal about not favoring crypto. When
0:17you meet people like him, what worries
0:19them the most about [music] crypto?
0:21>> I don't think it's something that they
0:22worry about. I think it's something that
0:24they have not spent enough [music] time
0:26and energy to understand. If you look at
0:27BlackRock, Mr. Larry Fink, the CEO. For
0:29the longest time he was a sharp [music]
0:31critic. And then the more he understand
0:32it, now he has turned into a keen
0:34supporter.
0:36>> Isn't crypto essentially an alternative
0:39for the dollar?
0:40>> I don't think it's going to be
0:42alternative. Crypto is a asset class in
0:44many instances, extremely useful, and
0:47the best form of transfer of value
0:50globally.
0:52>> If you had $100 and you can only put in
0:54banks, government, or technology
0:56companies, which one do you think will
0:58give you maximum return?
0:59>> I would say that in the first instance,
1:01it's always about [music] the
1:03technology. Then the government and the
1:06institutions will come into play.
1:09>> If some builder is watching you right
1:11now, who is probably in early 20s, what
1:14[music] one specific thing they should
1:16look at to create wealth in next 10, 20,
1:1830 years?
1:19>> I think it's important for them first
1:21understand the different landscape, do
1:22deep dives, focus on building things
1:24that will create value, that's
1:25sustainable, that has utility about it,
1:27that [music] has strong use cases.
1:29Because these are things that people
1:30will continue to use, they create value
1:31for the world, for yourself. So, those
1:33are the areas that they should focus on.
1:36>> Is there any specific sector that you
1:37believe is going to see the disruption
1:40in next 5, 10 years?
1:41>> I really believe that.
1:43>> If somebody is just waking up from a
1:45coma of 31 years and has no clue what's
1:47going on in the world, what would shock
1:49them the most about money today?
1:51>> Well,
1:56>> Before we start today's podcast, if you
1:58have found anything valuable from this
2:00channel, please subscribe. It's free. It
2:03takes less than a minute, but it means a
2:05lot to us. And to listen to the audio
2:07experience of this episode, please
2:09follow us on Spotify. Our today's guest
2:12is Richard Teng, co-CEO of Binance, the
2:15world's largest crypto exchange. He
2:18spent 31 years in traditional finance,
2:20starting at Singapore's central bank,
2:23then running Abu Dhabi's financial
2:24regulator before moving into crypto. And
2:27today, the biggest names on Wall Street,
2:31JPMorgan, BlackRock, Standard Chartered,
2:33are embracing the same crypto world he
2:36leads. In this episode, we'll discuss
2:39can a digital wallet replace your bank
2:41account in the future? Will the future
2:43generations ever have a bank account?
2:47Is the US dollar really dying, or is
2:49that just a rumor?
2:51Banks lend out over 90% of your
2:54deposits. So, is your money really safe
2:57in a bank? And if an AI trading agent
3:00loses your money, who is responsible for
3:02that? Watch this episode till the end,
3:05and to know more about Binance, check
3:06the link in the description below.
3:09>> [music]
3:13>> Before we start, I want to ask you if
3:18if someone's watching you for the first
3:20time,
3:20>> Yep.
3:21>> and they have no clue who you are, okay?
3:24And they're like this 1% audience who's
3:27never even Googled you.
3:29How would you explain them? Who are you?
3:31What do you do?
3:32>> Well, currently I'm the co-CEO of
3:34Binance. Binance is the largest crypto
3:36ecosystem in the world. We are a
3:39financial super app, so be
3:41beyond crypto, we offer our investors
3:44exposure, ability to take positions
3:47across a suite of products, right? It's
3:50not only crypto, it's commodities, it's
3:52petrochemicals, it's precious metals,
3:55it's US stocks, it's pre-IPO counters as
3:58well. And the product suite keep
4:00expanding. So, we have more than 320
4:02million customers globally and expanding
4:04very quickly. So, we are part of the of
4:07the global financial infrastructure.
4:09>> Right. But, who is Richard?
4:11>> Well, Richard is I'm trained I've been I
4:13spent many many
4:15spent more than 2 and 1/2 decades in
4:18financial By now,
4:20you know, I've been in financial
4:20services for more than 30 years. I
4:22started my career with the Central Bank
4:24of Singapore. Then, I was in Singapore
4:26Exchange and became CEO of Abu Dhabi
4:28Global Market, which is a financial
4:29services regulator.
4:31So, my background historically has been
4:33in traditional finance, has been in
4:35regulations.
4:36I got to discover crypto right about
4:382017.
4:40And the more I deep dive into it,
4:42I realized that this is going to be the
4:43future of financial services, future of
4:45money, right?
4:46>> Nice. So, if
4:49let's say you you spent like about 2 and
4:511/2 decades, which is like 25 26 years
4:55in finance.
4:56>> Yes. Nice. By now, I spent more than 31
4:58years in finance.
4:59>> Perfect. So, it's 31 years now.
5:01>> [laughter]
5:02>> So, if if somebody is just waking up
5:06from a coma of 31 years, okay?
5:08>> Yes. [laughter]
5:08>> And has no clue what's going on in the
5:10world, right? What would shock them the
5:12most about money today?
5:15>> Well,
5:16people the concept of financial
5:19institutions and the concept of money
5:22are rapidly changing, right? So, I mean,
5:25I grew up in the era where it's a
5:27brick-and-mortar world, right? So, if
5:29you want to
5:30set up set up a bank account, you have
5:32to go to a bank, you know, you you have
5:34your you need your thumb print on the
5:35passbook. There's no it widespread ATM
5:39there. You need to do a withdrawal, you
5:42queue up in the branch, right? So, the
5:45innovation has happened
5:48a bit slower throughout the past two
5:50decades, but it has happened to quite a
5:53fair fair bit of extent.
5:55But
5:56blockchain technology crypto has the
5:58ability to transform all that. So, if if
6:01you rethink from now on
6:03the future of financial services
6:06and given today's tools, architecture,
6:10infrastructure, and I say build a new
6:12bank, build a new securities firm, build
6:14a new asset manager, you'll not be the
6:16model that you see in the past, right?
6:19It will be something that's totally
6:20different because with the usage of
6:23blockchain and AI
6:25the future of how
6:28a bank provider, a payment provider, a
6:30exchange looks like will be totally
6:32different.
6:33So, many things can be fundamentally
6:35changed, right? We We are living in a
6:38very legacy system
6:41that has plenty of challenges. If you do
6:43a bank transfer today cross-border it
6:46takes two to three days. It takes huge
6:49cost, right? So, if you look at for
6:51example, India has more than 100 billion
6:54of remittance, right? In any given year.
6:57And if you look at the fees that the
6:58bank charge, 6 to 7%. So, you're taking
7:01off 6 to 7 billion dollars that
7:05you know, that can be substantially
7:06saved and give to given to your loved
7:08ones, your families, to the vendors that
7:10you need to pay.
7:13But if you do that via stablecoin crypto
7:15right? Those money
7:17can go to your loved ones, your vendors.
7:21The money can reach the end recipient in
7:23an instantaneous basis.
7:25Payments can be done. There's certainty
7:27of how much capital a corporate needs,
7:30right? Instead of holding large amount
7:32capital, if you have certainty of when
7:34the money is going to reach the end
7:35recipient you don't have to hold so much
7:37capital, right? So, there's a much more
7:39efficient way of doing. But this chain
7:42is replicated in every aspect of
7:44financial services. So, if you rethink
7:46the future of financial services, and
7:48you rebuild the future of financial
7:50services, it's going to look very, very
7:52different, even from what you see today,
7:54right? So, stablecoin is just starting
7:56to take off with
7:58clarity provided by the genius act. And
8:01many other countries around the world
8:02are now embracing stablecoin and coming
8:04out clear legislation. I mean, if you
8:06think about it, one of the biggest
8:08problem with trading today
8:11is
8:13you I can only trade within a certain
8:15certain amount of hours a day, right?
8:17Whether it's 9:00 to 5:00, whether it's
8:1810:00 to 4:00, depending on the
8:20countries you are in. It's held by, you
8:22know,
8:23it's constrained.
8:25And people don't realize the amount of
8:27liquidity risk that institutions, the
8:29corporates, the retail have to bear.
8:31Once
8:32the market closes, so to say, right? If
8:35there's anything that's happening in the
8:37world in terms of news flow,
8:39you can't take on new positions. You
8:41can't hedge your risk. You can't offset
8:44your position, right? So, you're bearing
8:46a lot of risk until tomorrow the market
8:49opens and the price point opens at a
8:51totally different level.
8:53So, if you think about it,
8:55isn't it better if you have allowed to
8:58do 24/7, manage your risk effectively,
9:01you know?
9:02Uh
9:03whether it's through human, whether it's
9:04through AI intervention, etc.
9:07So, that is what crypto has already
9:09offered, 24/7 trading from the start,
9:12right? So, the future world in terms of
9:14how all these things are being managed
9:17will be very different.
9:18Many securities companies in the world,
9:21exchanges, still operate on T+2, right?
9:24So, during that 2 days of clearing and
9:27settlement, there's a lot of risk that's
9:28being borne.
9:29In crypto, we have already moved to
9:32atomic settlement. It's instantaneous
9:33because the technology provides for
9:35that.
9:36So, if you think about it, there's so
9:37many facets within financial services
9:40that will be transformed very
9:42drastically.
9:43Once you have more and more
9:44institutions, and once you have more new
9:47FinTechs, more new providers coming to
9:49the market providing much better
9:51alternative of how
9:53financial infrastructure will look like.
9:55>> Okay.
9:56>> The transformation will take place very
9:57quickly.
9:58>> See, all of this
10:01to you it sounds very obvious, right?
10:03And because you're in this world, you
10:05understand this. And probably for 5 6%
10:08people in the world also this sounds
10:09obvious and that's why they're betting
10:12towards this future, right? But for a
10:14lot of people, majority of people, they
10:16still believe in the old way of money.
10:18>> Yeah.
10:19>> That money is still powerful. That money
10:21is still the most important source for
10:23them, right?
10:24>> Yes.
10:24>> So, what do you think? Why why people
10:26still hold on to it? Or rather I would
10:28say
10:30what is that one lie about money that
10:32people still believe today?
10:34>> You have brought up in the world, right?
10:36That the only sensible way or the only
10:38way that you
10:40you can transfer money is you go up to a
10:42remittance house or you go to the bank
10:43and say that this how I send money to
10:45the
10:46Firstly, it's habit. And secondly, you
10:48are not open up to new areas of growth
10:52and new areas that you can do that much
10:55quicker. And thirdly, it's structural,
10:58right? There are lot of structural
10:59impediments. Um even today the way
11:03financial institutions are are
11:05engineered. They're structured in a
11:07certain fashion, right? I mean, front
11:08office, there's middle office, there's
11:10back office. Middle and back office do
11:12certain functions. Uh they have to do
11:14through go through reconciliation, they
11:16have to go through accounting
11:17settlement, right?
11:19But
11:20if
11:22another competing bank come through or
11:24another big bank to say that, "Look, I'm
11:27going to do middle and back office very
11:28different. I'm not going to do
11:30reconciliation because I don't have to.
11:32Once we blockchain technology,
11:33everything is immutable. So,
11:35reconciliation
11:37become irrelevant, right?
11:40So, once all those structural changes
11:43come through, both in terms of the
11:45financial institutions itself, but in
11:47terms of financial landscape, right? So,
11:50what with stablecoin coming through and
11:52growing so rapidly,
11:53with real assets tokenization coming
11:56through, so even the Swift of the world
11:59are forced to look at it and say, "Hey,
12:01look, we're going to support blockchain,
12:02right?" So,
12:04it's also habit and it's also literacy
12:07and awareness.
12:09But once a lot of all these things come
12:11through,
12:13then people realize through
12:15media, through education, through your
12:18friends to say,
12:20"Instead of paying 6 to 7%,
12:22you can pay 0.1%.
12:25Isn't this much more superior?"
12:27But that
12:29change, especially depending on
12:31demographics, may come through
12:32differently. So, if you talked about to
12:34a person 20 to 30 30 years old,
12:36digitally savvy, right? Uh using mobile
12:39most of the time, uh they know how it
12:42works. They'll be the first embracer of
12:44this, yeah, definitely.
12:46And then you will go up the age group in
12:48the value chain, those change will take
12:50a a slightly more time, right? For them
12:53to embrace it. But you'll come through.
12:55Because
12:57technology will come through.
12:59It's just like initially when internet
13:01came through,
13:02uh did the embracement take place
13:04overnight? No, right? You'll take period
13:06of time. You'll take for
13:08mobile penetration, internet penetration
13:11to take place. So, that penetration will
13:13take place.
13:14So, it's a matter of speed.
13:16>> Let's say if you had $100.
13:17>> Yes.
13:18>> Yeah. And you had to you can only put in
13:20banks, government, or technology
13:23companies for the future who can either
13:25bring change
13:27>> and actually end up giving you a lot of
13:30uh
13:30power compounding or whatever you want
13:32to put it.
13:33>> And you're saying the $100
13:36is
13:38from a private investor or you're just
13:40looking
13:41>> investor, just you.
13:43>> You are You cannot afford to put $100 in
13:45the government. Government has its own
13:46funding [laughter] and
13:47has its own mechanism, right? There's no
13:50way that you can put a
13:51>> [laughter]
13:51>> Let's say all three of had one stock and
13:54equally priced $100, which one do you
13:57think will give you
13:59maximum return on the scale of power,
14:01not in scale of actually money?
14:03>> I would say that in the first instance,
14:05is always about the technology,
14:08right? Without the technology, without
14:10showing the world the capabilities,
14:13right? The rest may not follow, right?
14:16So, like it or not, regulations is
14:18always half a step, one step, one and
14:20half steps behind.
14:22Because the regulations can never keep
14:24up with changes and the new technology
14:27advances. So, it's very very important
14:30that we place
14:32you know, the emphasis on technology, on
14:35the use case, on the utility, how do we
14:37transform the world?
14:38Same that you're seeing in AI. I mean,
14:40the the regulations don't come in first,
14:42right? Same that you're seeing in
14:43quantum quantum computing, etc.
14:46Because you have to prove that this has
14:50the ability to take root, this has the
14:52ability to transform,
14:55and present a much better use case than
14:59what's the current state, right? Without
15:01that, the government doesn't know what
15:03it's looking at, right? The financial
15:05institutions are not
15:07understanding what it's going to look
15:09at. So, I would say in the first
15:10instance, it's always the technology.
15:12The technology is the most important
15:14part. You have to show what is the
15:16future state, what is the use case,
15:18what's the utility, right? How do you
15:20bring about the development? How is it a
15:22technology that can bring about
15:24betterment for the people, right?
15:27So, those are extremely important. Then
15:30the government and the institutions will
15:31come into play.
15:32>> Warren Buffett trade and he's been very
15:35vocal about
15:36not favoring crypto.
15:37>> Yes.
15:38>> And Charlie Munger and him, they both
15:40have
15:41said it multiple times in multiple
15:42locations.
15:43>> Yes.
15:44>> So, when you meet
15:47people like him or people
15:50who believe in that kind of philosophy,
15:52what worries them the most about crypto
15:54and this new asset class?
15:56>> I I don't think it's something that they
15:58worry about. I think it's something that
16:00for the skeptics is something that they
16:03have not spent enough time energy to
16:05invest to investigate and to understand,
16:09right? So, for the longest time, some of
16:11the largest money manager in the world,
16:13some of the largest financial
16:14institutions are skeptics and critics,
16:16right?
16:17So, if you look at BlackRock, um
16:20Mr. Larry Fink, CEO. For the longest
16:22time he was a sharp critic of all
16:23crypto.
16:24And then the more he understand it,
16:27now he has turned into a keen supporter.
16:29Jamie Dimon, one of the sharpest critics
16:32for the longest time,
16:34for 7 years has been coming out to say
16:37negative things about crypto. He has
16:39changed his stance, right? The more he
16:41understands it and what this technology
16:44represents and how you can transform
16:46financial landscape,
16:48now JP Morgan is trying to work with,
16:51for example, DBS
16:53on tokenized deposits, which is a
16:55important use case for cryptography, for
16:58blockchain as well, right? So, they are
17:00starting to embrace it in a very, very
17:02good way.
17:03So, it's about that awareness, about
17:05understanding, about deep dive and
17:07knowing the technology and what it can
17:09bring and how it can shape the future
17:11world.
17:12>> Do you think one of the reasons for a
17:13lot of these people to change their
17:15stance
17:16is about
17:19dollar devalue.
17:22>> Well,
17:23>> like everybody keeps saying that dollar
17:25is dying.
17:27>> Yeah, there are many people that may
17:29subscribe to that view. I actually
17:31don't, right?
17:33>> I don't. And I can explain to you why,
17:36right?
17:37I think that many
17:41There are some There are countries that
17:42want to move away from dollar dominance.
17:45I think that's a fact. And that fact has
17:47been in existence for a long period of
17:49time, right?
17:50But for that to come true, you need
17:53several elements to come into play,
17:55right? So today, if you look at
17:57globally,
17:58which is not only a reserve currency,
18:01but a safe haven currency,
18:05essentially that's just US dollars,
18:08right? So why are we in this current
18:10state?
18:11Because the US dollars is used as a
18:16denomination for majority of all the
18:19trade flows, right? So global trade
18:21flows is denominated. You have a well
18:24infrastructure under the existing
18:26system.
18:28Pretty much controlled by
18:31the US financial system, right? If you
18:33look at
18:34just US equities alone, it accounts for
18:38close to 60-70%
18:41of the equity value of the world, right?
18:44If you want to do a fundraising, right,
18:46at high valuation for tech company,
18:48where do you go to? The US market,
18:51right? So again, because of all that
18:55different parts of the ecosystem, are
18:58you able to move quickly?
19:00Uh, no.
19:02Would all the different countries want
19:04to
19:05come up with their own solutions?
19:07Definitely, right? So CB, for example,
19:10CBDCs is what the the countries wanted
19:13to do
19:14to also try to diverse from US currency.
19:18But
19:20that will take some time, right? And
19:23whether those experiment are going to be
19:26use is going to be transformational, it
19:29really depends on what is being embarked
19:31in those experimentation.
19:32>> True, but then
19:34isn't crypto essentially an alternative
19:37for the dollar?
19:39>> Well, I I
19:40>> Say crypto or let's say Bitcoin.
19:42>> I don't think it's going to be
19:43alternative for I mean, if you look at
19:46most of the stable coin today, it's
19:47still denominated in US dollars, right?
19:50So, I
19:51uh crypto is a is a asset class, right?
19:56It is in many instances extremely
20:00useful and the best form of transfer
20:03value, right? Globally, right? But the
20:06transfer of value has to be denominated
20:08in something.
20:10So, I don't see crypto as that. And the
20:14crypto usage goes way more beyond just
20:17uh you know, a mode of transfer of that.
20:20It's a store of value use in most
20:22instances. It's a mode of payment. It's
20:24a mode in which future financial
20:27infrastructure is being built.
20:29Um it's a mode that really facilitate
20:3324/7 settlement
20:35um
20:37through asset tokenization. And many
20:39many And the use case are being
20:40developed as you see in the DeFi space.
20:42There are so many
20:43new different projects.
20:45Um so, in the payment space again, in
20:48our W space, that's grown by 25 times in
20:51the last year alone.
20:52Um the script is just being written at
20:54this point in time. There are so many
20:56strong use case coming through. So, it's
20:57just not one dimensional.
20:59>> Crypto is giving a lot of freedom to
21:01people, right?
21:02>> Yes. There's not going to be a bank in
21:04the middle or no government in the
21:05middle or uh
21:07no charge which is 6-7% essentially
21:10comes down to 0.1% right? So it's it's
21:12like a lot of freedom for people to
21:15not put their trust into one
21:16institution, right?
21:19But that's also a gateway and freedom
21:22for let's say a scammer or a dictator or
21:26a trafficker to just attack an
21:28individual. So maybe this technology
21:30which is empowering a lot of freedom is
21:34at the same time empowering a lot of bad
21:37actors.
21:38So
21:39do you think about that sometimes that
21:42both sides are just getting empowered at
21:44the same time with the technology?
21:46>> same for every technology, right? So So
21:48just let me elaborate a lot more. The
21:51scammers, the fraudsters
21:54has existed for the longest time within
21:56financial services. I don't know whether
21:58you do this you receive this in India,
22:00but in Singapore we receive a lot of
22:02scam calls.
22:04People and that even people masquerading
22:06as our Prime Minister asking for
22:08transfer from banks and
22:10uh one unfortunate individual has been
22:13scammed to transfer 4.9 million dollars
22:15if you look at the press article, right?
22:17So scams, fraudsters exist in any
22:21situation, right?
22:23Especially the advent of technology such
22:25as AI,
22:27right?
22:28Uh people have to be very very cautious,
22:30right? So there are
22:33areas that
22:35we need to continue to invest in both in
22:37the
22:38traditional financial institutions to
22:41provide enough guardrails, right?
22:43But for
22:45our users for the global users whether
22:48they're users of financial institution
22:51or crypto
22:53they have to they have to do a lot of
22:55understanding research. Don't trust
22:58all these things coming through, right?
23:00Uh have your independent mind. Don't
23:01just trust I mean, normally the scammers
23:05play up to emotions to say that, you
23:07know,
23:08if you don't do this,
23:09uh,
23:10there's either a risk, right? You you
23:12have to give me access, otherwise your
23:15account will be, you know,
23:18accessed by other people or is that
23:19trust? I'm trying to secure your all
23:22opportunity is too good to to miss,
23:24right? I'm going to offer you how many
23:25percent return, etc.
23:28So, while it is, you have to be prudent
23:30and be cautious in whatever format
23:33that's coming through. So, it's not
23:34limited, right? Unlike what you see,
23:37uh, in crypto, it happens all the time
23:39in financial institutions.
23:41So, I think that's one.
23:43But,
23:44as a responsible entity, we have built
23:47in so many guardrails, right? And we are
23:49utilizing this technology in many sense
23:51that financial institutions are not
23:52utilizing.
23:54So, for example, on the cybersecurity
23:56side,
23:57we have invested very heavily.
24:00We have invested, you know, today we
24:02have more than 100 AI models
24:05just doing anti-fraud
24:08scanning. And last year alone, we helped
24:10our users avoid a close to 7 billion in
24:13terms of potential scams, right? More
24:15than 5.4 million users, close to 7
24:19billion in potential scams. Because
24:21using all these new technology, we have
24:23the ability to detect that. And when our
24:25users want to transfer funds, we warn
24:27them, are you are you sure about this?
24:29Who are you trying to
24:30So, those are things that as a
24:32responsible entity we do.
24:34>> You know, on this point, I will I will
24:35rather
24:36philosophical question to follow up,
24:39right? If you look at money,
24:42in the entire human time in last 5,000
24:44years of over history,
24:46we always needed someone who we trusted,
24:50right? Some kind of king, some kind of
24:53temple, or a bank, or a government, or
24:56something in the middle, that where we
24:57trusted, right?
24:59Crypto, for the first time,
25:01is where we all are coming together, and
25:04we are like, we don't trust someone, we
25:06trust math. We trust some code, or some
25:09math formula, right?
25:12So, are we moving away from
25:15trusting an individual, and outsourcing
25:17our uh what do you say?
25:20Outsourcing betrayal to a form of math,
25:24or a form of code?
25:25>> No, so
25:27what you say is not true. So, in the
25:29very early days, uh we barter trade,
25:32right? The transfer of value is
25:34different, right?
25:36Um and if you remember, if I bring you
25:40back 16 years, how
25:42Bitcoin manifesto came about,
25:45was really loss of faith, faith not of
25:49the central authority,
25:51but of the centralized platforms. The
25:55Lehman Brothers collapse, etc., etc.
25:57Financial institutions
25:59uh not being able to manage the risks,
26:01you know, you you can see those collapse
26:03coming through.
26:05And people feel disenfranchised. When
26:08something collapse, they can't do what
26:11they need to do via proper tran-
26:13transactions, right?
26:14Uh
26:15the system froze. You have a central
26:18party in that.
26:20So, that's how, you know, Bitcoin was
26:22then said, "Look, this is a better
26:24alternative way of payment, where you
26:28disintermediate from a center middleman.
26:32That there's a lot of weakness in tran-
26:35is opaque. We do not know what's in
26:37there. We do not know how they're
26:38regulated.
26:41The central bank said they're properly
26:42regulated, then how can they fail,
26:44right? So, they're sick. So, it's
26:46slightly different, and that then take
26:49root among a group of fair early
26:53adopters, early believers to say this is
26:55way superior. Instead of letting a
26:57middleman
26:58take 6, 7, 10% off
27:02my transfer, why shouldn't I do this
27:05using technology which is far superior?
27:08And today it has transformed, right? So,
27:10if you look at stablecoin, it's a one of
27:13the most important use cases
27:15of that technology.
27:17Um but even the banks are embracing it
27:20now. So, if you look at global banks
27:21like Standard Chartered, HSBC, they say
27:23that, you know, we're going to issue
27:24stablecoins. They've gotten licenses in
27:27in jurisdiction including in Hong Kong
27:29to do that.
27:30So, this technology is proving itself to
27:33be important and relevant
27:35and changing how future remittance, how
27:38future payment, how the future of
27:40financial services will look like.
27:42>> Aren't you as Binance is becoming the
27:44middleman?
27:45>> So, we are
27:47uh centralized
27:48>> you were against, you guys are becoming
27:50the same concept.
27:51>> No. So, that's different. So, the banks
27:54operate on the fractionalized reserve
27:56basis, right? So, for every
27:58$100 that they get,
28:01they keep
28:035%, 8% in terms of regulatory reserve.
28:08They then lend out the rest of that
28:09money, right? So, it's about risk
28:11management. For us it's different.
28:12Customers customers money 100%. And
28:15because we have this technology,
28:18we introduce proof of reserve so that
28:20customers can at any point in time check
28:22on the chain, check your address that
28:24the the money that's that the assets are
28:27there, right? So, at any point in time
28:28we hold north of 140 billion of customer
28:31assets.
28:33But those assets are properly
28:34safeguarded. And we became the first
28:37global exchange to have a home
28:38regulator, right? So, other than 20 over
28:41countries that we are regulated in, we
28:43are the only one with a home regulator
28:44that regulate us on an basis.
28:47So, not just about AML, transaction
28:49monitoring, how we do our
28:51know-your-customer, know-your-business,
28:53how we do enforcement, list things,
28:57how globally great it is regulated, but
29:00also areas of how we custodize, how we
29:03safeguard money,
29:05uh when we do our proof of reserve,
29:07which give transparency to our customers
29:10that your money is held safe where you
29:12can verify all this.
29:15The financial institutions, traditional
29:16financial institutions, are not able to
29:18do that for customers. So, it's a
29:20totally different concept.
29:22>> If you were 18 today, would you open a
29:23bank account?
29:25>> Well, it really depends. Um
29:28it depends on whether I'm
29:29technologically savvy, right? So, if I
29:31I'm 18 and not technologically savvy,
29:34uh and depending on whether there are
29:35banks in my country, if you look at I
29:38mean,
29:39I've been in financial services for more
29:40than 30 years.
29:42Since day one, central bankers,
29:43financial institutions around the world
29:45say that we have to bring about greater
29:47financial inclusion.
29:48But, as of today, you have 1.4 billion
29:51people around the world with no access
29:53to proper payment system, with no access
29:55to proper banking system, because
29:57financial institutions are making it too
29:58expensive, right? They don't want to
30:00serve this group of people.
30:02So, what's the alternative? What's the
30:04option?
30:05It is
30:06crypto.
30:08It is blockchain technology, it's
30:10Bitcoin, right?
30:11So, I go around the world to many parts
30:13of the frontier market, global south,
30:15emerging markets where people come and
30:17thank thank me, right? And thank
30:19Binance,
30:20because their life has improved
30:23tremendously once they got to know
30:26firstly, crypto, secondly, Binance using
30:28as a platform
30:30for store of wealth, for transfer of
30:33value, etc. Because these are they get
30:35access to things that they couldn't get
30:36access before, right?
30:39So, those are extremely important.
30:41So, I would say that if I'm eating,
30:43definitely I I believe I'll be saving
30:46up.
30:47Uh hopefully.
30:48And I would definitely embrace this.
30:51Because I will give you a situation. The
30:53future world
30:55if you think about it,
30:56you don't need you don't necessarily
30:58need a bank account.
31:00But you definitely a wallet. So, the
31:02wallet infrastructure is very very
31:03important, right? So, through your
31:05wallet, you get payments from your
31:06employers. It could be in the form of
31:08stable coins coming in on monthly basis.
31:11From there, using a combination of AI
31:14and blockchain,
31:15uh you can pay your normal bills,
31:18right? Whatever bills I need to pay.
31:20You can then do, using that,
31:23diversification, right? You can
31:26have a balanced portfolio. I want to
31:28invest in equities, commodities, credit.
31:32Uh part of it will go to earn product
31:34and savings. Everything can be managed
31:36out from that wallet, right? So, the
31:38concept of a bank
31:41to the future generation,
31:43my I believe will look very different as
31:45we continue to evolve. Because it's the
31:46one because through a mobile, through a
31:49wallet, you can do everything,
31:50literally.
31:52So,
31:53do you still need to go to a bank to set
31:55up a bank account? No. You know, you you
31:57what you need to is a wallet. So, which
31:59is why it's very important to
32:02think forward and rethink the future of
32:04the world and what's coming, right? So,
32:06if you look at
32:08we we continue to invest very heavily
32:10into our web 3 wallet on that front.
32:12Today, our market share stands at north
32:14of 80%.
32:16So, we believe that this all this
32:18technology and infrastructure, this are
32:20infrastructure layer, they're extremely
32:22important for the future world.
32:24>> So, you believe that the wallet
32:26infrastructure will become more
32:27important than the bank infrastructure?
32:29>> Absolutely.
32:30>> At some point?
32:30>> Absolutely.
32:31>> Do you think our kids will talk about
32:34bank accounts the way we talk about fax
32:36machines?
32:37Like
32:38>> don't know, but my my kids doesn't quite
32:40talk about bank account anymore.
32:41>> [laughter]
32:43>> You guys should not.
32:46>> [laughter]
32:48>> So, but who uh,
32:49you know, different economy have
32:51different setup, right? And different
32:54economy
32:55evolve and innovate at different pace.
32:57So, it really depends.
32:59Uh, but I would say that the more the
33:01evolution goes, the more prevalent and
33:04important all these new technology, this
33:07all these new way of working. Because
33:08today, once I give you a much better
33:10alternative, you will not go back to the
33:12past alternative. You will demand the
33:14future alternative. Why am I paying 6 to
33:177% if I can do
33:190.1%? Why am I not allowed to take
33:23positions when there's 24/7 trading,
33:27right?
33:28Why do I wait have to wait for 2 to 3
33:31days if I can do transfer on an
33:33instantaneous basis? It's only the
33:35retail is asking that the corporates are
33:36doing that. So, you look at all the very
33:39big corporate treasuries, they are
33:40moving to say, "Look, I need to On a
33:43daily basis, I need to transfer hundreds
33:45of millions of funds from Australia to
33:47Europe to US to different parts of Asia.
33:49I need to allocate that. Isn't it better
33:52to make use of stablecoin or crypto
33:54technology to do that transfer?
33:56So that I have to I hold less capital.
33:59My capital is put to better use. It's
34:01much greater efficiency. I save a lot of
34:04cost for the organization. And I have
34:06certainty for myself, all my
34:08subsidiaries, all my vendors, when are
34:10they going to receive the payment?
34:12That brings about greater capital
34:14velocity. There's a better alternative.
34:16And once they do that, they will not go
34:18back to the existing state of trade,
34:19right?
34:20>> True. You You said
34:22it depends
34:24on different economies how the
34:25manifestation will take place, right?
34:28And it's an important question that
34:30different economies will function in
34:32different ways. They will have different
34:34thought process.
34:36What if
34:38some people come together and decide
34:40they want to ban crypto? What happens
34:42then?
34:43>> Well,
34:44you have countries that ban crypto,
34:46right? But as with technology, you can
34:50try to curtail it, you can try to ban
34:52it, but the technology will continue to
34:53advance very, very quickly, right? Like
34:55it or not.
34:56And there are many countries around the
34:58world that are embracing it.
35:00Crypto is becoming mainstream. You you
35:02can't turn the back the clock now,
35:03right? So, the the longer
35:07you actually ban this technology, the
35:09further behind the value chain the
35:11country will be.
35:13And over time actually impacts a
35:14country's competitiveness, but those are
35:16country-level consideration, those are
35:18policy consideration. Countries will
35:20have their own considerations to take
35:21into play why they do certain things.
35:24But from a competitive angle, as I
35:26mentioned, AI and blockchain crypto
35:28technology the most two most important
35:31technology that will
35:33underpin every economic sector.
35:35If you think about every sector economic
35:37sector in the world going forward,
35:39whether is trade, whether is financial
35:41services, whether is media
35:43entertainment, every sector can be
35:45rebuilt
35:47using these two fundamental technology.
35:49They they look extremely different 5, 10
35:52years from now compared to the current
35:53state that we see today.
35:54>> So, it won't be completely banned?
35:57>> It's not something that you'll be able
35:59to ban it. And that it has now gone into
36:01mass adoption, right?
36:04Uh so, I my view, but uh
36:06might maybe wrong. A lot of times it's
36:08much better to embrace the technology.
36:11To embrace it and to regulate it. Then
36:14you have proper oversight
36:16of the of the technology. What it does.
36:19And then you can put in place
36:20guardrails, right?
36:22So, a lot of countries, I mean, if you
36:24look at the history of the world,
36:26countries that close themselves off,
36:28right? And to the outside world,
36:32tends to fall behind very quickly.
36:34Because they are not in touch with the
36:36latest innovation, the latest technology
36:38in the past world
36:39uh his history, they don't get access to
36:42military technology like gunpowders and
36:45such. And they fall behind very very
36:47quickly. So, every time a country shut
36:49its borders, etc.,
36:52uh and don't get don't continue to
36:54embrace innovation
36:57and all these new changes coming
36:59through,
37:00that's a risk to the country.
37:02>> Another technology, I was reading some
37:04comments that uh you guys are using AI
37:07agents a lot in Binance, right? Right?
37:10Are you using AI agents for better
37:12trading as well?
37:13>> Absolutely. So, we use AI across the
37:16organization. So, for example, this year
37:18every business unit leaders, the mandate
37:21is to make every function within Binance
37:25much more effective and much more
37:26efficient with the usage of AI.
37:28And then from our user level, it's also
37:31giving them the right tools through AI
37:34so to facilitate that, right? So,
37:36[snorts]
37:37we introduce Binance AI Pro, where you
37:40can do pro- proper analytics, where you
37:42can do
37:43uh assessment of anal- analytics, you
37:46can do trading on it.
37:48And the future world, again,
37:50of all the other things I mentioned, is
37:52one that agentic trading
37:55is going to be prevalent, right?
37:57So, agentic trading, agentic payment is
37:59going to be prevalent. So, you think
38:00about it.
38:02Um all these are important usages of
38:05blockchain.
38:07And important usage of payment
38:10going forward will be stablecoins and
38:12crypto because
38:14once you use agentic, you know, tokens
38:15burn as you I mean, if you talk about
38:18cents, you can't afford to make payments
38:20using your traditional card payment or
38:22traditional banking payment. Cuz it's
38:24too costly, right?
38:26So,
38:28crypto instantaneous transfer
38:31low cost becomes the natural default
38:35currency for AI. That's why we always
38:38say that
38:39crypto
38:40stablecoin are the natural currency for
38:43the AI generation because of all these
38:45changes that you're seeing, right?
38:47And agentic trading coming through,
38:49agentic payment coming through. It's
38:51only natural that the evolution will
38:53continually evolve very quickly.
38:55>> Explain me agentic trading. Is like on
38:57my behalf an agent will trade?
38:59>> Yes. So, you give the parameters.
39:01>> an AI agent
39:03loses my money at 3:00 a.m.? Who do I
39:05Who do I blame?
39:06>> The AI The AI model, you have to make
39:09sure that you have proper risk
39:10parameters, right? You have proper cut
39:11loss measures, etc. I mean, you for For
39:14experienced trader, you know what to do.
39:15You can build in all these guardrails
39:17for yourself.
39:18>> But who do I blame? Let's say a some bug
39:21feature happened and then my agent end
39:24up losing my entire life savings on your
39:26platform.
39:26>> Save Save got all those, right?
39:28[laughter]
39:29So, do things that you understand and
39:31put in place proper guardrails. Uh don't
39:33have fat finger. You know, the
39:34traditional way you have fat finger as
39:36well, right? So, have proper safeguards
39:39and it's very important that you test
39:40the agent to make sure he's doing all
39:42the right things.
39:43>> Even after like putting proper
39:45safeguards, would you trust AI agent
39:48with all your money?
39:50>> It's about risk diversification, right?
39:52So,
39:52>> But would you trust yourself?
39:54>> I I will make sure that I test it
39:56properly first. I make sure that there's
39:58a proper track record of how it's
40:00operating before I continue to invest.
40:03As we I will say always say, right?
40:04Start small.
40:06Make sure that you understand it. Make
40:07sure you understand the potential and
40:10the pitfalls of anything anything that
40:12you put your money into because it's
40:14your money that you're dealing with
40:16before you continue to expand the
40:18portfolio.
40:19>> But it Here's the scary part about it,
40:21right? What if I in my first few trades
40:23I end up making money with my little
40:25amount, and then I put my whole amount,
40:27and then
40:28>> Well, then then you're not being
40:29prudent.
40:30>> [laughter]
40:31>> Then my AI agent messes up the entire
40:34thing.
40:34>> No, that is not No, no, it's all about
40:36risk management. It's very important to
40:37make sure that the AI agent is tested
40:40for different market conditions.
40:42All right?
40:43Uh
40:45different situations and circumstances.
40:49So, it's very important for you to test
40:51the parameters, and you know what you're
40:52getting into.
40:53>> What was the toughest thing for you
40:55personally as a CEO
40:56when you took over?
40:58>> Well, I I do think that is
41:01stating the ship and working through
41:04with all the regulators around the world
41:07to show that we have pivoted very, very
41:09strongly.
41:11We have invested greatly into
41:12compliance.
41:15I mean, financial institutions make
41:17mistakes.
41:18It's not only us, but you look at all
41:20the global financial institutions, they
41:22breach law, they breach AML provisions
41:25um
41:26at some point in time.
41:27The rules and standards are ever
41:29evolving, so we need to keep pace with
41:30those rules and standards. But what is
41:32important as we responsible entity like
41:35ourselves is to acknowledge those
41:37mistakes, make the right investments,
41:39and then come out of it much stronger,
41:41which we have done. All right? So, we
41:42have demonstrated
41:44that okay, we make mistakes, we have
41:46underinvested in compliance. Now we have
41:49made huge commitment to investment to
41:51compliance and invested greatly. We work
41:53with global regulators to embrace
41:55regulations, to embrace compliance. We
41:58have a very strong and robust team now.
42:01And you know, we continue to work very
42:03closely with policy makers, regulators
42:06around the world, so that good
42:08regulations, smart regulations are being
42:11promulgated to regulate this sector for
42:13the benefit of everybody.
42:16We want proper regulations. Our
42:17interests are aligned with users and
42:20aligned with regulators.
42:22We want a responsible ecosystem in place
42:26that's properly regulated for the
42:27benefit of everybody. So, our interests
42:30are all aligned. It's how do we get
42:31there and to make sure that smart
42:33regulations come through instead of
42:35one-dimensional regulation that just
42:37focuses on risk
42:39which then
42:40the purpose of legislation because for
42:43any legislation that just focus on risk
42:45without
42:46also supporting innovation and growth,
42:49right? Then it's going to be very very
42:51challenging. As ex-regulator, I can tell
42:53you that the easiest form of regulation
42:55is to regulate everything to the ground.
42:57It's to have zero risk, but when you
42:59have zero risk,
43:00you have zero activity. How is it going
43:02to benefit the economy and the people,
43:04right? So, you need to come up with a
43:06balanced smart regulations to support
43:09both sides. In Binance, I hope I
43:11continue to do the same as an innovator,
43:14as a builder, working with a fantastic
43:16team, right? So, I've got my
43:18the founders, co-CEO E working
43:20alongside. We have many brilliant
43:22people. And we continue to believe that
43:25we need to continue that
43:28mission of Binance which is the freedom
43:30of money, build the best platform out
43:32there
43:33into a financial super app to serve our
43:35users in terms of all their financial
43:37services needs. And that's where we are
43:39heading towards.
43:40>> See, so if one
43:43some builder is watching you right now
43:45who is probably
43:47in early 20s, want to build his career
43:49or her career, right?
43:51The money is changing, world is
43:53changing, AI and technology is changing,
43:56geopolitics is changing. So many changes
43:58happening in the world.
44:01What should they focus on or which
44:03industry perhaps or what one specific
44:05thing they should look at
44:07to create wealth in next 10, 20, 30
44:09years.
44:10>> I would say that the fun the the
44:12technology will always come through,
44:13right? So, there will always be new
44:14technology coming through.
44:16Uh the sectors will always evolve. The
44:19opportunities will always evolve.
44:21So, I think it's important for them
44:23first to understand spend as much time
44:25possible understand the different
44:26landscape do deep dives. But, it's also
44:29understanding if they are builder
44:32focus on building things that will
44:33create value.
44:35It's very important, right? So, if you
44:37focus on building things that will
44:38create value that sustainable that has
44:40utility about it that strong use cases
44:43you won't go too far wrong, right?
44:44Because these are things that people
44:45will continue use that create value for
44:48the world for yourself. So, those are
44:50the areas that should they should focus
44:51on. Continue to look at ways to create
44:53new value or enhance existing value.
44:56>> Is there any specific sector that you
44:58believe is going to see
45:01the disruption in next 5, 10 years?
45:04>> I would say that
45:04>> that there's not a lot of work has done.
45:06So, somebody can maybe look at
45:08>> I I really believe that every economic
45:10sector in the world will be transformed
45:12using
45:13AI and crypto.
45:16Um
45:17entertainment.
45:18Right?
45:19The payments in the entertainment, for
45:21example, will be totally transformed.
45:23Supply chain financing will be totally
45:25transformed using AI and crypto.
45:28Financial services, I think we have
45:29touched on.
45:31But, if you look at even
45:33different type of sectors, right? There
45:35are so many sectors with so many
45:36opportunities
45:38that's ripe for transformation, right?
45:41So, if you inject the right lens, if you
45:43have the right expertise, and you use
45:45the right technology, you can create a
45:47lot of new value in each of these
45:49economic sector.
45:50>> Got it. Well, thank you so much. Here is
45:53one last thing I I've started asking my
45:56guest these days that I really like to
45:58ask is
46:00what is one advice that nobody should
46:02follow?
46:07>> Hey, I have this great investment.
46:10>> [laughter]
46:11>> Huge returns for you. So, don't trust
46:14those. Do your own research. It's
46:16extremely important.
46:17Just don't trust.
46:19I mean,
46:21just don't trust what other people tell
46:22you without
46:24understanding, without researching,
46:26without analyzing.
46:28Um it's going to be challenging, isn't
46:31it? So, so importantly,
46:34do your own research.
46:36I mean, very important that you are the
46:38master of your own money and your own
46:40knowledge. So, invest time in all those
46:43things.
46:43>> All right. Thank you so much. That's a
46:45great one.
46:46>> Thank you so much.
46:47>> Thank you.
46:48>> [laughter]
46:48>> So, I was in the Budapest. So, I saw the
46:51match
46:52between
46:52>> Are you PSG fan or Arsenal?
46:55>> Actually, I'm
46:57a fan of football. I'm not a fan of both
47:00clubs. [music]
47:01But, I think, you know, they are
47:03very, very good clubs and they play
47:06But, it's very tight football that they
47:07play on the finals, right? Very, very
47:09cautious, very tight football, yeah.
47:10>> Which, which is your favorite club?
47:13>> Uh Liverpool.
47:15>> [laughter]
47:17>> Thank you so much for watching this
47:19episode till the end. Now, you have to
47:20do three things. Number one, subscribe
47:23to this channel right now. The more you
47:25subscribe, the better the guests we will
47:27be able to get for you. Number two,
47:30please comment and let us know what did
47:33we do wrong and what did we do right?
47:35Because the more you give us feedback,
47:37the better we will be able to make
47:38episodes for you. And number three,
47:41please share this episode with at least
47:43one person because one conversation can
47:46change someone's entire life. I'll see
47:49you next time. Until then, keep figuring
47:50out.
47:51>> [music]
48:00[music]
48:07>> Mhm. [music]

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