CZ's Hong Kong Speech: Key Insights on Stablecoins, RWA, DAT, AI in Crypto's Future

Changpeng Zhao (CZ) delivered a compelling speech at the Hong Kong Crypto Finance Forum on August 27, 2025, diving into hot crypto tracks like stablecoins, real-world assets (RWA), decentralized asset treasury (DAT), and AI integration with Web3. Sharing his visionary take on industry trends, CZ highlighted regulatory dynamics, innovation challenges, and growth opportunities, drawing from Binance's dominance in stablecoin trading. As crypto markets evolve in 2025, his remarks underscore stablecoins' role in global finance and AI's potential to explode transaction volumes, offering valuable insights for investors navigating volatility.

Stablecoins: Globalizing the U.S. Dollar and Market Dominance

CZ emphasized stablecoins' evolution from a market "safe haven" to a strategic tool for extending U.S. dollar influence worldwide, with USDT alone holding $100 billion in U.S. Treasury bonds. He noted their low entry barriers and high liquidity make them ideal for everyday use, contrasting with the limited success of Central Bank Digital Currencies (CBDCs) in over 20 countries since 2014. Binance handles 70% of global stablecoin volume, underscoring the asset class's maturity. CZ urged nations to develop multiple stablecoin products to capitalize on this trend, warning that regulatory clarity, like the U.S. GENIUS Act in July 2025, favors U.S.-backed models. This positions stablecoins as a bridge for traditional finance into crypto, potentially driving $3 trillion in monthly volumes.

• USDT history: Initiated by Brock Pierce in 2014, explosive growth post-2017 driven by Asian demand.
• BUSD example: Launched 2019 with Paxos, peaked at $23B in 2023 before U.S. regulator shutdown.
• CBDC failures: No market success despite trials, due to high barriers and lack of innovation.
• Regulatory edge: GENIUS Act restricts CBDCs, solidifying U.S. dollar hegemony via stablecoins.
• Binance role: 70% trading volume highlights centralized platforms' efficiency in stablecoin ecosystems.

RWA Tokenization: Challenges and Untapped Potential

CZ pinpointed liquidity shortages, regulatory complexities, and flawed product designs as key hurdles for RWA tokenization, using real estate and stock examples to illustrate. He noted tokenized bonds like U.S. Treasuries succeed due to high liquidity, unlike illiquid assets such as homes or art. Global tokenization opportunities abound, with CZ calling on regions like Hong Kong to lead to avoid economic sidelining. Defective mechanisms, where tokens lack real asset linkage, doom many projects. Overall, RWA could unlock trillions in value if these issues are addressed, blending traditional assets with blockchain efficiency.

• Liquidity issues: High-frequency assets like Treasuries thrive; low-turnover RWAs struggle with thin order books.
• Regulatory barriers: Multiple licenses needed for futures, spot, and digital assets, complicating operations.
• Product flaws: Stock tokens fail without underlying ties, leading to unviable models.
• Global call: Countries must innovate in RWA to stay competitive in digital finance.
• Success case: Stablecoins backed by Treasuries as a proven RWA template.

DEX Future: Surpassing CEX in Scale and Efficiency

CZ forecasted decentralized exchanges (DEX) overtaking centralized ones (CEX) in 10-20 years, citing no KYC requirements, transparency, and tech advancements for lower fees. Current DEX challenges include user experience and higher costs, but wallet familiarity will drive adoption. Token incentives on DEX could reduce fees dramatically as tech improves. This shift aligns with Web3's decentralization ethos, potentially reshaping trading volumes.

• Timeline: DEX dominance in 10-20 years as users adapt to wallets.
• Advantages: No KYC, full transparency, incentive-driven fee reductions.
• Current gaps: Poorer UX and higher costs compared to CEX.
• Incentive models: Tokens lower fees, attracting more volume over time.
• Long-term vision: DEX as the standard for crypto trading efficiency.

DAT: Bridging Traditional Investors into Crypto

CZ outlined Encrypted Asset Treasury (DAT) as a packaging tool for digital assets, similar to stocks, with models ranging from passive holding to active trading and ecosystem investments. He favored simple passive strategies, like BNB holdings, to minimize costs and legal risks. DAT serves as an entry point for traditional investors, including state enterprises, into crypto without direct exposure. This could funnel billions from legacy finance into digital assets.

• Models: Passive (e.g., Bitcoin focus), active trading, multi-asset, ecosystem.
• Preferred: Simple passive to avoid high fees and litigation.
• Bridge role: Eases traditional entry, like sovereign funds into crypto.
• Cost efficiency: Low-management models reduce operational burdens.
• Potential: Attracts institutional capital for crypto ecosystem growth.

AI and Web3 Integration: Explosive Growth Ahead

CZ predicted AI will rely on digital currencies for transactions due to KYC incompatibilities, exponentially increasing volumes in Web3. Current AI-Web3 products resemble memecoins but hold immense potential as public goods. Decentralized financing via tokens could fund AI's massive compute needs, like OpenAI's $6.5B per PB. This fusion could transform payments and DeFi.

• Transaction surge: AI's KYC avoidance drives crypto use.
• Current state: Immature integrations, often meme-like.
• Funding model: Tokens for decentralized AI development.
• Compute costs: 1-2 PB at $6.5B each highlights scale needs.
• Future: AI as Web3 public good, boosting ecosystem volumes.

CZ's speech offers a roadmap for crypto's 2025 evolution, emphasizing stablecoins and AI as growth drivers amid regulatory shifts. Investors should watch RWA and DAT for entry points on compliant platforms with transparency.