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Binance, CZ: Bitcoin payments are destined to grow
Binance, CZ: Bitcoin payments are destined to grow
Blockchain

Binance, CZ: Bitcoin payments are destined to grow

By Eleonora Spagnolo - 11 Nov 2020

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Bitcoin payments, DeFi, the impact of Covid 19, there’s this and much more in the analysis for 2021 carried out by the CEO of Binance, Changpeng CZ Zhao

One of the first topics addressed is decentralized finance. CZ says DeFi is here to stay. However, he has a particular opinion on decentralized exchanges: 

“DEXs are also well fitted for listing small and less mature coins, which provides a good validation ground for larger CEXs.”.

Moreover, CZ is convinced that centralized and decentralized finance will live together, driving the sector forward:

“I believe we’ll see more convergence on the product offerings on the CeFi front. But fundamentally, DeFi and CeFi are targeting different users. I hope both will help grow the industry”.

Binance, for its part, has already introduced several innovations in DeFi, including the Binance Innovation Zone to provide liquidity to DeFi tokens and help less experienced investors. And it is ready to embrace further innovations. 

This has been a golden year for Binance, so much so that, points out the CEO, institutional investors have grown enormously. In the third quarter of 2020, they were 60% more than in the previous quarter and 46% more than at the beginning of the year. This shows that interest in the cryptocurrency sector is very high.

Bitcoin as a payment system

However, this interest in the sector has not coincided with the growth in Bitcoin payments. CZ says in this regard: 

“Growth in payments was one of the most obvious use cases we hoped to see more of in 2020, but hasn’t taken off as strongly expected”.

What is the reason for this delay? For the CEO of Binance the reasons are different, as are the solutions: 

“This may be mainly due to the fact that existing fiat payment rails are pretty well established and are quite hard to replace in one swift move. A better strategy may be to latch onto existing fiat payment rails so that they can co-exist. Binance Card is one step in that direction”.

2021 may be the year of the turning point thanks to PayPal’s entry into the industry:

“I believe it is hugely positive for the industry and something we’ll see continued growth in over the next 12 months”.

On the subject of Bitcoin, CZ believes that the higher the price of Bitcoin, the more investment there will be in mining. 

2021, however, could be the year of stablecoins. This is what Changpeng Zhao said: 

“I believe we’ll see cross-border payments with stablecoins continue to increase next year. It is much easier and cheaper to make cross-border payments using stablecoins or with any cryptocurrency than traditional methods. Cryptocurrencies are much more efficient for this than traditional fiat payment rails. I think this will be a driver of stablecoin adoption in 2021”.

And Binance Coin? BNB will certainly not stand by and watch, especially since Binance’s cryptocurrency is a very versatile currency,” explains CZ: 

“There are so many applications and use-cases for BNB that I personally can’t count or keep tabs on now, from gaming to cross-border remittances. There is a large diverse community in the BNB ecosystem now. I don’t know what they will come up with next, but I am sure many of them will be very exciting”.

According to CZ, 2021 will also be the year of the NFTs, which could be adopted in several areas, from virtual objects to concert tickets. But, he adds, this is an area yet to be explored

Covid in the crypto and blockchain sector

What is certain is that 2020 was a complicated year due to Covid-19, which, says CZ, has changed industries forever. 

Yet at the end of the day there were some advantages:

“People are more used to working remotely and transacting internationally, which all help crypto adoption”.

Among the “advantages” of Covid, CZ highlights some forms of support for the economy, such as Quantitative Easing, which he believes can lead people to enter the crypto sector. 

However, it is difficult to understand what may happen in the future, given the pandemic and the cash injections coming from governments. 

Binance, for its part, will continue to invest in the growth of the sector, as it has already done with Binance Smart Chain and its Accelerator Fund

Security and regulation

Security and regulation are perhaps the two aspects that are most likely to hold back the development of the sector.

On the security front, Binance, in the words of its CEO, has deployed and will continue to deploy all possible tools. Among Binance’s efforts in this regard are: 

  • Education systems to prevent users from engaging with the wrong projects and scams, 
  • Tools to protect private keys, 
  • TSS (threshold signatures) to secure user funds.

The weak element in the chain, however, remains the human being. CZ and Binance continue to work to better protect users: 

“Attackers constantly prey on psychological flaws such as the desire for quick information and greed. There are increasingly sophisticated ways of abusing trust, including spear phishing and social engineering. This can circumvent some of the most fundamental defense mechanisms we have relied on in the crypto ecosystem such as 2FA. At Binance, we continue to strive for zero trust on our enterprise security and trading platform security to protect our users”.

2021 could also be a turning point on the regulatory front. Binance continues to work with the authorities in the various countries in which it operates to ensure even better standards for the development of the sector. And that’s not all:

“We are also working with virtually all compliance tool providers in the industry, helping them to make better tools to improve compliance in the industry. We are expecting to see more positive results from our efforts in this area in 2021”.

What will Binance do in 2021?

Binance will continue to offer its users what they want: 

“I don’t like to speculate about what’s in store for Binance in the next 12 months. We are just continuing to keep our heads down and building products users want and love. That’s our goal”.

CZ has one hope, that next year will be less crazy than 2020:

“On the personal side, my New Year’s resolution for the last 10 years has been getting a six pack, but I’ve never got there. My main hope is just that 2021 will be less crazy than 2020 and people’s lives continue to improve, any part we can play in that will be icing on the cake”.

Eleonora Spagnolo
Eleonora Spagnolo

Journalist passionate about the web and the digital world. She graduated with honours in Multimedia Publishing at the University La Sapienza in Rome and completed a master's degree in Web and Social Media Marketing.

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