Binance CEO, CZ, Views The Current Financial System as Broken

Changpeng Zhao (CZ), the CEO of Binance was quoted saying that the current global financial system is broken. He believes Bitcoin and other crypto are the solution to this global problem.

CZ notes the corporate culture which gang presses CEOs to pursue short-term objectives instead of lasting solutions. His blog post views investors as part of the cause,  vaunting CEOs who can push up stock prices and make good profits every quarter. He thinks investors should rather praise their CEO who can save cash and build a strong balance sheet that can help a venture weather a crisis.

The Binance CEO however views his compatriots as a scapegoat of the broken system within which they operate. The system is what he believes deserves the bulk of the blame. The system’s norm is driving CEOs to maximize shareholder dividends with bonuses worth millions of dollars. Now if a crisis like the COVID-19 pandemic strikes, many firms find themselves between a rock and a hard place, surviving is difficult.

Systemic Failure Through Money Printing

According to Zhao, most of these companies end up being bailed out by the government through the printing of more money. The money printing odyssey negatively affects the ordinary taxpayer. The increased money in the system drives up inflation and currency depreciation, yet the pay remains static. It is akin to them being robbed for they end up poorer, without the ability to complain.

The printing of money cushions the banking system from a catastrophic failure. This is counterproductive according to Zhao, for when the banks fail, the people can easily point out who failed. And since the finger-pointing may reach the echelons of power, governments do not want this. The Binance CEO chimes in by acknowledging, while the government does so to save faces and make everyone happy, the poorer retail investors bear the brunt. But most of them are not in the know, so believing it is the usual market correction, they can’t complain.

CZ Sees Crypto as the Answer

Zhao remains optimistic and bullish with crypto as a consequence of the continued money printing by the government. Crypto comes with no government bailouts, not in the form of printing money. 

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Even then, he believes most investors wouldn’t switch to crypto even after realizing the inherent broken nature of the current financial system. Zhao still urges investors to stop accumulating cash and instead invest in bitcoin.

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