Binance CEO says difficulties in converting fiat currencies like the dollar to crypto are a big hurdle to bring in the next 100 million users. “We’re seeing a lot of traditional institutions that used to provide fiat ramp channels pull away,” said Changpeng Zhao. Zhao was speaking at the crypto event Token2049 in Singapore. Loading Something is loading.
Thanks for signing up!
Access your favorite topics in a personalized feed while you’re on the go.
Binance CEO Changpeng “CZ” Zhao thinks a key problem in expanding cryptocurrency’s reach is the lack of resources that help convert cash into crypto, and vice versa.
At Token2049 — a crypto event in Singapore that Insider attended — Zhao was asked about the challenges in bringing the next 100 million users into cryptocurrencies.
“Today, to be very frank, it’s actually fiat ramps,” he responded. Fiat ramps refer to a service that exchanges fiat currency like the US dollar into cryptocurrency — like Bitcoin and Ethereum.
“With tightening regulations in the earlier part of this year, we’re seeing a lot of traditional institutions that used to provide fiat ramp channels pull away,” said Zhao.
His comments come amid a mixed year for crypto.
Crypto exchange FTX’s collapse last year saw the largest-ever withdrawal of Bitcoin from exchanges in November, amounting to $1.5 billion.
The Metropolitan Commercial Bank — one of the first banks to dive into cryptocurrency — said in January that it would pivot away from the business.
Then, in March, crypto-friendly banks like Silicon Valley Bank, Signature Bank, and Silvergate Bank collapsed. The collapse of these banks leaves crypto firms with fewer avenues to convert fiat currency into crypto assets.
Regulatory crackdown on crypto companies has also deepened in the US.
In June, the Securities and Exchange Commission sued the US’s largest crypto exchange Coinbase, alleging that it had violated securities rules, just a day after it filed similar charges against Binance and Zhao.
And even though prices for Bitcoin — the most traded cryptocurrency — have risen since November 2022, at just over $26,000, they are nearly a third of a peak price of $69,000 in November 2021.
Even so, Zhao is among the wealthiest figures in crypto, with a net worth of $27.1 billion, derived largely through his stake in Binance, per the Bloomberg Billionaires Index. His exchange is the largest crypto exchange by trading volume in 2023.