At the World Economic Forum Annual Meeting 2026 in Davos, Switzerland, former Binance CEO and founder Changpeng "CZ" Zhao delivered a sharp critique of the traditional fractional reserve banking system while revealing ongoing discussions with numerous governments about asset tokenization.
Zhao directly linked the fractional-reserve banking model to recurring liquidity crises within the global financial system. He argued that technology, including blockchain and crypto, does not create new financial risks but instead exposes pre-existing weaknesses in traditional banking structures. "The fractional-reserve banking system sits at the center of repeated liquidity crises," Zhao stated during his panel appearance.
In a significant revelation about his current activities, Zhao disclosed that he is actively engaged with "probably a dozen governments" regarding the tokenization of their assets. He explained the rationale, stating, "This way the government can actually realize the financial gains first and use that to develop those industries." He identified tokenization, alongside exchanges and stablecoins, as a "huge" and proven aspect of the crypto industry.
Zhao's government outreach has a track record. He has previously worked with officials in Kyrgyzstan on a som-pegged stablecoin initiative, served as an adviser to the Pakistan Crypto Council established in March 2025, and held discussions with Malaysian officials on crypto regulatory frameworks in January 2025.
On the topic of crypto adoption, Zhao offered a sober assessment of payments, noting a convergence with traditional methods. "Payments is something that we have tried and not really conquered, have not really started in crypto. We've tried, but nobody really pays in crypto," he admitted. He also expressed skepticism about the likelihood of unified global crypto regulation, instead advocating for a regulatory "passport" model.
The Davos appearance follows a tumultuous period for Zhao. After serving a four-month prison sentence in 2024 related to Binance's AML compliance failures and resigning as CEO, he was pardoned by U.S. President Donald Trump in October 2025. While this cleared a potential path back to Binance, Zhao stated in December 2025 that he was "retired," hinting he has no immediate plans to return to a leadership role at the exchange.
