Binance’s CZ: Crypto winning isn’t dependent on banking failures Binance’s CZ: Crypto winning isn’t dependent on banking failures
Banking and crypto can coexist says CZ - stressing importance of being better than banks to win.
2 min read
Updated: Jul. 15, 2023 at 1:52 am UTC
Smorshedi / CC BY-SA 4.0 / Wikimedia. Remixed by CryptoSlate
Binance CEO Changpeng Zhao (CZ) said we should not rely on banking collapses for Bitcoin’s success.
“From a crypto community perspective, we should not rely our success on the failure of others.”
During a Twitter AMA, a question on banking failures benefiting Bitcoin cropped up. In response, CZ said he believes banking and crypto can coexist, and it isn’t a zero-sum game.
Furthermore, CZ dismissed the notion that banking success or failure has any meaningful impact on Bitcoin – clarifying that crypto is just one of many places to park money outside banks, such as real estate, stocks, or gold.
First Republic Bank
Regulators seized First Republic Bank, making it the second-largest collapse in U.S. banking history – after the fall of Washington Mutual in September 2008.
First Republic received a $30 billion lifeline from 11 other banks in March, including Bank of America, Wells Fargo, Citigroup, and JPMorgan. Since then, it had continued to sound the alarm, with the Federal Deposit Insurance Corporation (FDIC) attempting unsuccessfully to broker a buyout in the meantime.
Following its collapse, JPMorgan has agreed to acquire parts of the business, including its loans, securities, and deposits, with plans to convert existing branches into “JPMorgan wealth centers.”
Despite warning signs of an industry under pressure, banking experts have called First Republic’s collapse a “delayed reaction to the turmoil in March” – rather than an intensification of seven weeks ago, as Silicon Valley Bank, Signature Bank, and Silvergate Bank buckled or were seized.
Crypto is not the only option
Giving his view on the matter, CZ implied more bank collapses could happen, saying the banking industry is long-established and prone to inefficiencies. Also, being privy to bailouts, companies operating in this space are incentivized to take on risk.
“I don’t blame the players, but you’ve got to look at the game.”
On March 11, following vulnerabilities exposed by the failure of Silicon Valley Bank, etc., Bitcoin rose above $20,000, reaching a peak of $31,000 four weeks later.
The move was attributed mainly to shifting investor sentiment toward hard assets, such as Bitcoin, due to its finite supply.
However, CZ downplayed the correlation, saying different people prefer different types of assets. And given the range of options to park money, he doesn’t see crypto as the only choice for those looking to de-risk from banks.
“It doesn’t mean when one thing has risk; people come to crypto directly. There’s many other choices in between.”
The growth of cryptocurrency comes from improving its use and utility – rather than counting on the demise of traditional banks, CZ said. He emphasized that this can be achieved by being better than banks, such as faster and more cost-effective transactions.
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Samuel Wan
Samuel Wan, a finance professional turned full-time crypto content creator, values individual autonomy and personal freedom in his pursuits.
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
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.
