Binance CEO Changpeng Zhao confidently asserted last July that decentralized finance (commonly referred to as DeFi) will overtake centralized finance (CeFi) in terms of prominence and importance in the financial sector. According to his forward-looking view, this change is expected to take place within the next six years.
Zhao pointed to the recent increase in institutional interest in cryptocurrencies and sees it as a validation of the industry and its technology. He believes that even a fraction of the trillions of dollars that institutional investors control in the stock market investing in crypto assets will significantly boost the growth of the cryptocurrency market.
Binance boss optimistic about DeFi dominance
Even two months after his initial assessment, his conviction remains unshakable: he firmly believes that the DeFi space is on the verge of surpassing centralized finance in terms of its importance and importance in the wider financial sector. This assertion reflects his strong belief in the transformative potential of DeFi as a force that will reshape the way we perceive and engage with the financial system.
Live now. https://t.co/e4bVfhKwRB
— CZ 🔶 Binance (@cz_binance) September 1, 2023
During a Sept. 1 X Spaces live event, dubbed a CZ AMA, the Binance boss expressed his thoughts on the future of DeFi. He expressed his belief that as the industry becomes more decentralized, there will be improvements, and he also hinted that in the near future, the transaction volume of DeFi may exceed that of CeFi.
“Defi is the future, its volume is about 5% to 10% of the volume of CeFi, which is not small, right […] The next bull market is likely to make DeFi bigger than CeFi,” CZ said.
CZ’s claims are based on the industry’s latest achievements. In the first two quarters of 2023, Uniswap, the largest and most widely used decentralized exchange, outperformed centralized industry giant Coinbase in terms of spot trading volume.
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According to DeFiLlama, the trading volume on decentralized exchanges in the past week was about $12 billion. DEX accounts for nearly 18% of the overall cryptocurrency spot trading market.
Median trading volumes on the top three decentralized exchanges (DEXs) have reportedly grown in a 48-hour period following the June 9 legal action by the U.S. Securities and Exchange Commission (SEC) against centralized exchanges Coinbase and Binance up 444%. As of publication time, the DEX has an hourly volume of $722.7 million.
At the same time, Zhao reiterated the exchange’s commitment to compliance in response to the recent regulatory challenges the exchange has faced in several countries. Zhao said that despite regulatory investigations and legal action in countries including Australia, the United States, Canada and Europe, Binance is still prepared to comply.
In addition to projecting the dominance of decentralized finance (DeFi) relative to centralized finance (CeFi) in the upcoming bull market, CZ also shed light on the idea that cryptocurrency adoption should be universally accepted, albeit with varying degrees of urgency in different countries.
Featured image from OKX Exchange