Changpeng Zhao, the founder of Binance, the world's largest cryptocurrency exchange, evaluated that Hong Kong has the potential to compete with major markets like the United States and the United Arab Emirates (UAE). However, he emphasized that the key is how quickly policy changes can be implemented.
Zhao noted in an exclusive interview with South China Morning Post (SCMP) on the 29th (local time) that "the Hong Kong government has shown a clear attitude toward embracing Web3 and possesses the capacity to move quickly." He added, "One should not assess future potential based solely on the current situation" and that "it should be based on the pace of change."
He identified the expansion of tradable cryptocurrencies as an immediate necessity. Currently, only four items can be handled by licensed exchanges in Hong Kong: Bitcoin, Ethereum, Avalanche, and Chainlink. Zhao suggested that this is "not sufficient" and that a model should be introduced that allows exchanges to directly decide which tokens to list, similar to Japan.
Hong Kong is currently striving to become a virtual asset hub by restructuring its regulations. However, there is significant controversy surrounding the pace and scope of regulations. In particular, the stablecoin ordinance that came into effect on the 1st has dampened market enthusiasm by strengthening requirements for reserve management, customer identification, and anti-money laundering obligations. Zhao explained that, "As the concept of stablecoins became overheated, the authorities took a step back," adding that "when transitioning from a regulatory-free state to a regulatory framework, one generally has no choice but to adopt a conservative stance."
Zhao pointed out that Hong Kong must strike a balance between minimizing financial risks and fostering industry growth. He stated that "the U.S. and UAE have not performed any special magic" and that "if Hong Kong also decides to change policies in the meeting, it can change immediately."
Zhao no longer operates Binance directly due to an agreement with the U.S. government. However, he still provides advice to regulatory authorities in 12 countries and maintains influence in the industry. Zhao mentioned that the fact Binance has not applied for a license in Hong Kong is due to the "conservative regulatory attitude of the Hong Kong authorities who want to avoid mistakes."
Born in China and migrating to Canada with his parents at the age of 12, Zhao is one of the most well-known figures in the global cryptocurrency sector. After pleading guilty to money laundering charges in the U.S. in 2023, he stepped down as CEO of Binance and was released in September 2024 after a four-month imprisonment. He is now focused on regulatory consulting and activities with the blockchain network BNB Chain.
He expressed satisfaction with the fact that after Donald Trump's presidential election, the U.S. Securities and Exchange Commission (SEC) dropped the lawsuits against him. However, he denied any direct business relationship with President Trump. He explained that his only interaction with Trump's son, Eric Trump, at the Hong Kong Bitcoin Asia event was just a "face-to-face encounter in a group setting."
Zhao also maintained an optimistic outlook on the future of blockchain and cryptocurrencies. He stated, "We are in the early days of internet diffusion" and predicted that with the combination of AI-based software, the use of blockchain will increase explosively. He emphasized that "one should not attempt to define a new industry with outdated terminology like banking" and that it should be viewed as a different ecosystem from traditional finance.
He stated, "If the regulatory environment can change swiftly, Hong Kong could become a global cryptocurrency hub," adding that "the future depends on speed."