CZ Says Hong Kong Should Relax Financial Innovation Regulations
Binance founder Changpeng Zhao stated at Bitcoin Asia 2026 in Hong Kong that to maintain its status as a financial center in Asia, Hong Kong should not only rely on the Hong Kong Stock Exchange but should continuously experiment with digital assets and financial innovations.
Bitcoin Asia 2026 is being held at the Hong Kong Convention and Exhibition Centre from August 27 to 28. CZ mentioned that Hong Kong's policy thinking is relatively open and has the conditions to serve as a "sandbox" for China to explore digital currencies and financial innovations; however, he did not provide specific policy recommendations regarding Hong Kong's licensing system, exchange access, token issuance rules, or RWA regulatory provisions.
CZ identified the tokenization of RWAs as a key direction, believing that asset on-chain can break through traditional trading time zones and cross-border limitations, allowing global investors to access markets that were previously less liquid. He specifically noted that Asian investors face channel and time friction when investing in U.S. stocks, and if stocks and other assets are tokenized and enter crypto platforms, users may first gain exposure to on-chain assets before extending to cryptocurrencies like Bitcoin.
He believes that the current key constraint in Hong Kong is not a complete lack of regulation, but rather the formation of extremes in certain areas of "no regulation" or "over-regulation"; the industry needs to establish an operable middle ground between risk control and innovation space. The Hong Kong Monetary Authority has launched a stablecoin issuer sandbox in 2024 to gather regulatory feedback on payment, settlement, reserve management, and risk control models, but participation in the sandbox does not equate to approval for stablecoin issuance or public fundraising.
In a global market comparison, CZ stated that the UAE is leading in digital asset regulation, the U.S. has made significant progress in stablecoin and trading platform rules, Japan has a positive attitude, Hong Kong is progressing rapidly, while Singapore is more conservative. This reflects his personal regulatory judgment at the event, rather than a unified quantitative ranking of rules, enforcement intensity, or the number of licenses across jurisdictions.
CZ expects that the combination of AI and cryptocurrencies will first manifest in stablecoin settlements: in the future, a large number of AI agents will need payment tools that are programmable, cross-border, and available 24/7 for tasks like procurement, sales, negotiations, and transactions, with stablecoins likely to be adopted first, followed by gradual integration with Bitcoin and other public chain assets. He mentioned that he has discussed token issuance with several leading AI companies and noted that the funding cost for building a 1GW data center could reach $30 billion to $50 billion, with potential models including granting token holders future rights to computing power or revenue rights.
In terms of market mechanisms, RWAs and stablecoins attract brokers, custodians, issuers, market makers, and cross-border funds into crypto infrastructure by moving the holding, payment, clearing, and trading of real assets on-chain; if Hong Kong expands compliant issuance and secondary circulation space, the beneficiaries will be platforms with licensing, custody, auditing, KYC, clearing, and liquidity capabilities. Tokenization reduces trading time and distribution boundaries but does not automatically eliminate asset valuation, issuer credit, investor suitability, and cross-border securities law risks; during the regulatory transition period, liquidity will prioritize stablecoins and high-quality asset tokens that are transparent in reserves, have clear redemption paths, and allow institutional participation, while projects with low liquidity or unclear rights definitions will face higher discounts.
Source: Public Information
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CZ's regulatory path has evolved from the rapid expansion of a global trading platform to clashes with regulators in various countries over licensing, customer protection, and compliance responsibilities, and now to an emphasis on operable rules and regional competitiveness. Binance has grown in multiple markets as a cross-border platform, gradually strengthening its compliance framework; its founder now places the UAE, U.S., Japan, Hong Kong, and Singapore within the same regulatory competition framework, reflecting that large crypto platforms can no longer rely solely on borderless user growth but must strive for fiat entry, custody qualifications, institutional clients, and local regulatory certainty. The value of Hong Kong's "sandbox" role lies not in evading regulation but in allowing products to first validate reserves, redemption, compliance, and investor protection mechanisms within a limited scope.
In terms of capital pathways, RWAs encapsulate the rights of brokers, funds, bonds, stocks, money market assets, and receivables as on-chain certificates, and then complete subscriptions, redemptions, pledges, and cross-border settlements through stablecoins. Traditional asset management relies on business days, agent banks, central securities depositories, and regional brokerage channels; the on-chain structure attempts to compress issuance, registration, settlement, and distribution into continuously operating smart contracts and compliance whitelists. CZ's focus on RWAs is to allow users who previously found it difficult to access U.S. stocks and global capital markets to first enter asset trading through on-chain entry, with platforms, wallets, and stablecoin networks handling fund retention and subsequent product distribution. The profit center of this pathway lies not only in token issuance fees but also in continuous fees from custody, redemption, trading, market making, pledging, and cross-chain settlement.
Historically, the Eurodollar market bypassed some domestic financial distribution boundaries through offshore dollars, while ETFs provided complex assets to the public in standardized shares within brokerage accounts; RWAs attempt to redo these two things on-chain: replacing some securities registration with token shares and some cross-border settlement cash with stablecoins. The difference is that tokenization does not change the legal ownership, tax obligations, bankruptcy isolation, or issuer credit risk of the underlying assets. Hong Kong is transitioning from experimental mechanisms to scalable institutional design: the stablecoin sandbox first tests participant capabilities but does not yet grant public issuance qualifications; if in the future compliance identities, secondary trading, custody, and redemption mechanisms are connected, a truly deep RWA market may form.
Essentially, this is a reconstruction of the industrial chain: the competitive units of traditional finance are exchange seats, bank accounts, clearing members, and regional licenses; the competitive units of on-chain finance will shift to programmable assets, stablecoin liquidity, compliance identity certificates, custody key control, and global distribution interfaces. AI agents accelerate this change because software agents cannot wait for bank operating hours, manual verification, and cross-border wire transfers, but can call stablecoin payments and smart contract settlements according to preset permissions. The reason stablecoins become the medium for agency transactions before Bitcoin is that agents require low-volatility pricing, predictable accounting, and instant redemption; volatile assets like Bitcoin can serve as collateral or investment but struggle to naturally fulfill high-frequency procurement and service settlement roles. Whoever can integrate compliant stablecoins, redeemable asset tokens, and AI agent permission systems may grasp the pricing power of the next generation of cross-border financial entry.
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