Payments with Bitcoin, DeFi, the impact of Covid 19, there is this and much more in the analysis for 2021 by Binance CEO Changpeng Zhao.
One of the first issues addressed is decentralized financing. CZ says that DeFi is here to stay. However, he has a particular opinion about decentralized exchanges:
"DEXs are also well equipped to list smaller and less mature coins, which provides a good validation base for larger CEXs."
Furthermore, CZ is convinced that centralized and decentralized finance will live together, propelling the sector forward:
“I think we will see more convergence in product offerings on the CeFi front. But fundamentally, DeFi and CeFi target different users. I hope they both help grow the industry. "
Binance, for its part, has already introduced several innovations in DeFi, including the Binance Innovation Zone to provide liquidity to DeFi tokens and help less experienced investors. And you're ready to embrace new innovations.
This has been a golden year for Binance, so much so that, the CEO points out, institutional investors have grown enormously. In the third quarter of 2020, they were 60% more than in the previous quarter and 46% more than at the beginning of the year. This shows that the interest in the cryptocurrency sector is very high.
Bitcoin as a payment system
However, this interest in the sector no he has coincided with the growth of payments in Bitcoin. CZ says about it:
"Payments growth was one of the most obvious use cases that we expected to see more of in 2020, but it hasn't taken off as expected."
What is the reason for this delay? For the CEO of Binance the reasons are different, as are the solutions:
“This may be mainly due to the fact that the existing fiat payment rails are quite well established and quite difficult to replace in a quick move. A better strategy may be to hold onto existing fiat payment rails so that they can coexist. Binance Card is a step in that direction. "
2021 may be the turning point year thanks to PayPal's entry into the industry:
"I think it is very positive for the industry and something in which we will see continued growth over the next 12 months."
On the subject of Bitcoin, CZ believes that the higher the price of Bitcoin, the more investment there will be in mining.
2021, however, could be the year of stable coins. This is what Changpeng Zhao said:
“I think we will see that cross-border stablecoin payments will continue to increase next year. It is much easier and cheaper to make cross-border payments using stablecoins or with any cryptocurrency than traditional methods. Cryptocurrencies are much more efficient for this than traditional fiat payment rails. I think this will drive the adoption of the stablecoin in 2021 ”.
Y Binance Coin? BNB certainly won't stare, especially since Binance's cryptocurrency is a very versatile coin, CZ explains:
“There are so many applications and use cases for BNB that I personally cannot count or monitor right now, from gaming to cross-border remittances. There is now a large diverse community in the BNB ecosystem. I don't know what they will come up with next, but I'm sure many of them will be very exciting. "
According to CZ, 2021 will also be the year of NFT, which could be adopted in various areas, from virtual objects to concert tickets. But, he adds, this is an area that has yet to be explored.
Covid in the cryptocurrency and blockchain sector
The truth is that 2020 was a complicated year due to Covid-19, which, according to CZ, has changed industries forever.
However, at the end of the day, there were some advantages:
"People are more used to working remotely and transacting internationally, which helps the adoption of cryptocurrencies."
Among the "advantages" of Covid, CZ highlights some forms of supporting the economy, such as quantitative easing, which it believes can lead people to enter the cryptocurrency sector.
However, it is difficult to understand what may happen in the future, given the pandemic and the injections of cash from governments.
Binance, for its part, will continue to invest in the growth of the sector, as it has already done with Binance Smart Chain and its Accelerator Fund.
Security and regulation
Safety and regulation are perhaps the two aspects that are most likely to slow down the development of the sector.
On the security front, Binance, in the words of its CEO, has deployed and will continue to deploy all possible tools. Binance's efforts in this regard include:
- Educational systems to prevent users from getting involved in wrong projects and scams.
- Tools to protect private keys,
- TSS (threshold firms) to secure user funds.
However, the weak element in the chain is still the human being. CZ and Binance continue to work to better protect users:
"Attackers constantly prey on psychological flaws, such as the desire for quick information and greed. There are increasingly sophisticated ways to abuse trust, including spear phishing and social engineering. This may bypass some of the more fundamental defense mechanisms that we have relied on in the crypto ecosystem, such as 2FA. At Binance, we continue to strive for zero confidence in the security of our company and the security of the trading platform to protect our users. "
2021 could also be a turning point on the regulatory front. Binance continues to work with the authorities in the various countries in which it operates to ensure even better standards for the development of the sector. And that's not all:
“We are also working with virtually every provider of compliance tools in the industry, helping them create better tools to improve compliance in the industry. We hope to see more positive results from our efforts in this area in 2021 ”.
What will Binance do in 2021?
Binance will continue to offer its users what they want:
“I do not like to speculate on what awaits Binance in the next 12 months. We continue to keep our heads down and create products that users want and love. That is our objective ”.
CZ has a hope, that next year will be less crazy than 2020:
“On a personal note, my New Years resolution for the past 10 years has been to get a six-pack, but I never got there. My main hope is that 2021 is less crazy than 2020 and that people's lives continue to improve, whatever role we can play will be the icing on the cake. "