Changpeng Zhao: China Building a Bitcoin Reserve is “Inevitable”

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As a researcher with extensive experience in the crypto space, I find Zhao’s insights particularly intriguing. His unique perspective, shaped by his involvement in Binance and subsequent legal challenges, offers a fascinating lens through which to view the potential global adoption of Bitcoin reserves.

At the Bitcoin MENA conference held in Abu Dhabi on December 9th, Zhao opined that it is smaller nations who are more likely to pioneer the use of national Bitcoin reserves. However, he also predicted that larger entities such as China would eventually join this trend.

Zhao admitted that the Chinese government’s actions regarding cryptocurrency are challenging to foresee because of its lack of clarity. In his words, “The policies of China are tough to predict due to a lack of transparency.” However, he also highlighted that when China decides to take action, it can do so swiftly and significantly.

China’s Potential Approach

Zhao speculated that China might quietly accumulate Bitcoin before making any formal announcements. “I’d be shocked if [the Chinese government] announced something and then did it,” Zhao remarked. “I’d be much less surprised if they accumulate and then announce […] They have to do it at some point because it’s the only ‘hard’ asset.”

Although Zhao didn’t find decisive proof that China is accumulating Bitcoin yet, he remains optimistic that they will establish a strategic stockpile of such digital assets to maintain their competitiveness in the growing global transition towards cryptocurrencies.

Influence of U.S. Bitcoin Reserve Plans

Zhao’s remarks surface during discussions about the possibility of countries establishing Bitcoin reserves as a widespread practice. This notion gained momentum when President-elect Donald Trump suggested a strategic U.S. Bitcoin reserve during his election campaign. Trump vowed to accumulate a national hoard, but critics claim that such a move could predominantly boost the wealth of existing BTC holders by causing prices to rise. Nevertheless, this plan has not been set in motion yet, as Trump does not assume office until January 20th.

Zhao proposed that China, along with other nations, might observe the U.S. plan closely before taking action themselves. According to him, “Once Trump’s proposal becomes a reality, we will then understand how other countries respond.

CZ’s Current Role and Restrictions

Zhao’s perspectives emerge as he distances himself from hands-on roles at Binance due to legal disputes. Previously the CEO, Zhao admitted to breaching U.S. Anti-Money Laundering regulations and served a four-month term in prison before his release in September. As part of the agreement, Zhao is barred from managing Binance and has limitations on specific business dealings. Nevertheless, he suggested that a potential presidential pardon from Trump could be on the table post January 20th.

As Bitcoin increasingly becomes recognized as a strategic investment, Zhao’s prediction that China may create a Bitcoin reserve aligns with the broader trend of countries adopting cryptocurrencies. Whether China makes this move sooner or later, the idea of Bitcoin serving as a “solid” national asset seems to be gaining widespread acceptance across the globe.

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2024-12-11 14:30