Changpeng Zhao, a prominent figure in the digital asset space, shared significant insights on national crypto strategies and the future intersection of AI and blockchain during a discussion at the Token2049 event in Dubai on April 30.
Speaking with Raoul Pal, Zhao addressed the growing trend of nations seeking guidance on integrating cryptocurrencies. A key piece of advice centered on the pitfalls of overly localized crypto infrastructure, a common goal for countries entering the space.
Zhao cautioned against nations attempting to build entirely self-contained systems, including wallets, custody solutions, and order books. He argued that securing billions in digital assets requires substantial funding and specialized expertise, which is often scarce. Setting up robust crypto custody solutions is particularly challenging.
“For each cold wallet, you need about 15 signers,” Zhao explained, illustrating the logistical difficulties. He highlighted the challenge of finding numerous trustworthy, non-public individuals across different global locations who aren’t motivated by financial gain alone and possess the necessary integrity.
Similar concerns apply to localized exchanges and order books. Zhao warned that fragmenting liquidity across many national platforms would lead to poor trading conditions. “If you divide each country with their own order book, liquidity is going to suck,” he stated, noting that such markets could experience extreme price volatility, especially during turbulent periods.
Zhao also touched upon his advisory work with nations exploring national crypto reserves. He pointed to Bhutan as a progressive example, leveraging its surplus clean energy for Bitcoin mining, positioning itself as an early adopter for national wealth building.
He urged countries yet to allocate funds to crypto reserves to act decisively, warning that delaying could mean acquiring assets at significantly higher prices later. His recommendation involves starting with modest amounts managed by professional custodians before transitioning to more secure cold storage as holdings grow.
Beyond national finance, Zhao reiterated his stance on the burgeoning AI sector. He strongly advocated for developing AI agents focused on genuine utility, criticizing the proliferation of AI-themed tokens lacking real-world applications.
“Today there are so many different AI agents with a token, but the agents don’t have any real utility,” he remarked. Zhao expressed disdain for platforms enabling easy creation of token-backed AI agents, deeming the vast majority of resulting tokens “useless.”
Despite this critique, Zhao sees AI as a transformative force poised to drive crypto adoption. He envisions crypto becoming the native currency for the AI economy, arguing traditional payment systems are incompatible. “AI is not going to swipe a card or get an SMS code… It’s going to be crypto,” he concluded.