Binance Founder Changpeng Zhao: Banks Should Not Fear Blockchain
Binance founder Changpeng Zhao questioned why some believe banks must fear blockchain or need protection. He stated that blockchain is a faster, cheaper, and more verifiable method of value transfer, and it is an open technology that anyone, including banks, can use.
He did not specify any particular legislation or bank. Recent contexts include the SEC opening a five-year pilot for tokenized national market system stocks, banks and asset management firms issuing tokenized funds and deposit tokens on public chains, and some regional banks in the U.S. launching tokenized deposit networks that still retain deposit insurance and allow for near-instant settlement. Institutions like a16z have argued that permissionless chains can implement risk controls under existing anti-money laundering and sanctions frameworks, and the OCC has provided clarifications regarding banks paying network fees and operating nodes.
Zhao has previously stated at events like Davos that banks will not disappear, but the necessity for physical branches will decline; speed itself does not create new risks, but rather exposes old flaws in the fractional reserve system more quickly. He also predicts that initial public offerings will move to the blockchain, differing from the current practice of listing first and then packaging synthetic stocks. Binance's application for a market regulation license in the EU was close to approval but was withdrawn, which he attributed to political interference.
Open technology does not equate to open licenses. What banks fear is not the hash algorithm, but how deposit insurance, capital requirements, and customer fund segregation rules will be applied to blockchain settlements. Framing blockchain as a track that banks can also utilize shifts the opposition from 'who replaces whom' to 'who connects compliant accounts to a faster settlement layer first.'
In terms of market mechanisms, this shifts the narrative from disrupting banks to banks accessing the track: what is bought are tokenized deposits, stablecoin settlements, and on-chain fund shares, while what is sold is a zero-sum story that must replace bank licenses with blockchain. Beneficiaries are licensed institutions that can already issue deposit tokens or tokenized government bonds; those under pressure are pure trading platforms that rely solely on anti-bank slogans for customer acquisition but cannot enter the clearing member system. Verification is easier, but that does not mean the responsible parties disappear.
Additionally, stablecoin legislation has already been implemented in some jurisdictions, changing the excuse from 'regulation does not allow' to 'whose liabilities are recorded on whose books.' The advantages of speed and cost must become tools for banks' daytime liquidity, still depending on custody, sanction lists, and legal definitions of failure and settlement.
Source: Public Information
ABAB AI Insight
Zhao frames fear as a categorical error: banks are liability and license entities, while blockchain is a clearing track. He emphasizes that anyone can use it, including banks, shifting Binance from the opposing side of banks to the track supplier side. His statement at Davos that 'banks will not disappear' aligns with this 'no need to fear': physical branches can be compressed, but licenses cannot be replaced by hashes. The obstruction of the EU license indicates that open technology encounters political market access, not a competition of transmission speed.
Capital is simultaneously buying two legs: tokenized funds on public chains and tokenized deposits that still appear on bank balance sheets with deposit insurance. The former seeks composability, while the latter seeks bankruptcy isolation. The advantages of speed and cost are real for cross-border payments and securities settlements; for retail deposits, insurance and last-resort lending are the pricing factors. If initial public offerings merely package already listed stocks, banks and central securities depositories remain; if they are on-chain from the issuance date, the rights to underwriting and registration fees will shift.
In contrast to SWIFT being diverted by instant payments, tokenized deposits relative to stablecoins, and brokerages tokenizing stocks while voting rights still follow traditional registration. The industry phase is a race for tracks within licensed institutions, not an announcement from exchanges that banks are outdated. Whoever can write 'more easily verifiable' into a regulatory-acceptable audit trail will sell open technology into core ledgers; those who continue to frame banks as fossils that must be protected will be excluded from institutional procurement.
Structure belongs to technology replacement rewritten as infrastructure access. Replacement occurs during clearing time delays and verification costs, not in deposit insurance. The mechanism is: faster tracks reduce on-route capital occupation; after occupation decreases, banks can turn the same liabilities into programmable tokens without having to cede liabilities to unlicensed platforms. What is feared are clearing fees and channel fees, not the term blockchain itself. Protection, if aimed at licenses, targets solvency, not transmission protocols.
ABAB News · Cognitive Laws
Banks fear how licenses and insurance will go on-chain, not the transmission protocol itself
Open technology can be used by anyone, but open licenses can only be used by license holders
Faster and cheaper will first consume clearing fees, not automatically eliminate deposit reserves