Binance CEO dismisses concerns that institutional crypto ETFs threaten decentralization Binance CEO dismisses concerns that institutional crypto ETFs threaten decentralization
Changpeng Zhao's comments concern BlackRock, Fidelity, and other financial giants as they race to enter the Bitcoin spot ETF market.
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Updated: Jul. 6, 2023 at 9:42 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
In a Twitter Spaces conversation on July 5, Binance CEO Changpeng Zhao said dismissed worries that large companies posed a threat to the crypto sector.
Over the past several weeks, leading asset managers, including BlackRock and Fidelity, have applied for spot Bitcoin ETFs. Crypto community member DeFi King asked Zhao whether those large institutions pose a threat to decentralization.
Zhao responded:
“The short answer is no, I don’t think they are a threat. I think in a decentralised world, no one should have the power to block or ban anyone else, including other large centralised entities.”
Zhao added that large companies can actually benefit the crypto industry as they bring new users to the sector. He suggested that many institutional investors are likely interested in crypto but cannot use international trading platforms like Binance.com and are not comfortable using U.S. cryptocurrency exchanges such as Binance.US.
Instead, he said, institutional investors are likely comfortable investing through BlackRock, Fidelity, Citadel, or other firms with which they have an existing relationship.
Zhao says competition is minimal
Zhao acknowledged that large financial institutions could compete with Binance for users “a little bit” but otherwise downplayed this. He said:
“To be honest, look at our user base … three speakers so far out [five or six] are from Africa. You guys are not going to use BlackRock, right? So the overlap is minimal.”
Zhao also said that Binance “welcome[s] more and more players, the larger the better” and added that competition can help the company to improve.
Finally, Zhao commented on conspiracy theories that suggest BlackRock and other institutions deliberately became involved in crypto alongside separate regulatory pressures in order to drive existing cryptocurrency companies out of the industry. Binance, notably, is the defendant in a lawsuit brought by the U.S. Securities and Exchange Commission on June 5.
Zhao argued that, for these theories to be accurate, institutions should have instead become involved in crypto prior to regulatory actions. He said that Binance would expect to see pressure after financial institutions established themselves in the crypto industry and after those firms found that crypto firms had overlapping services.
Zhao concluded that he believes Binance has little overlap with major financial firms and said that the U.S. institutional market is one that his firm has “blocked very heavily.”
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Mike Dalton
Before transitioning to crypto writing in 2018, Mike studied library and information sciences. Currently, he resides on Canada's West Coast.
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Jacob Oliver
Jacob Oliver is a recovering academic and English teacher turned crypto journalist and web3 writer. He holds a Ph.D. from the University of Washington.
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Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.
Changpeng Zhao, popularly known as “CZ,” is a notable figure in the cryptocurrency world, primarily for founding and leading Binance, the world’s leading cryptocurrency exchange by trading volume.