CZ at Token2049: Crypto, AI, and the Case Against Localized Regulation

At Token2049 in Dubai, Binance founder Changpeng Zhao (CZ) made a rare public appearance to share his views on crypto regulation, AI utility, and national digital reserves.

Crypto Infrastructure: Centralization vs Localization

CZ addressed a major regulatory hurdle facing crypto companies—localization. Many regulators, he said, want local custody, teams, and order books. But duplicating crypto infrastructure across every jurisdiction is unrealistic.

“Setting up secure custody for billions of dollars requires deep expertise,” he said. “You can’t find 15 trustworthy, non-public signers in every country. That scale is impossible.”

He warned that fragmented liquidity from local order books could hurt the entire ecosystem. “If you divide each country with their own order book, liquidity is going to suck.”

National Reserves and the Case of Bhutan

CZ also revealed that some countries have sought his advice on holding crypto as part of their strategic reserves. Bhutan was highlighted as an early mover, using surplus hydro energy to mine Bitcoin.

He advised countries considering crypto reserves to start with small allocations, use professional custody, and move to cold storage as holdings grow. “They’ll have to buy later at a higher price,” he added.

AI Tokens: “99.99% Are Useless”

CZ was blunt in his assessment of the AI token boom.

“Today, there are many AI agents with tokens. But most have no real utility,” he said. He criticized token launchpads that let anyone mint an agent, calling them hype-driven and ineffective.

Instead, he urged builders to focus on useful agents. “I want to see agents that can actually help people—where the token has a purpose.”

AI + Crypto = A Natural Match

According to CZ, the future of crypto lies in its role within AI-driven economies. “The currency for AI is crypto,” he said. “AI won’t swipe cards or use SMS codes. It needs something native, something programmable.”

He believes that as AI grows, crypto will become the default payment layer powering agent-to-agent and agent-to-human transactions.

CZ praised the UAE for being pro-crypto and pro-business. He recalled moving there in 2021 after a vacation turned into a permanent decision. “The ministers here are smart and crypto-savvy. It’s also one of the safest places in the world.”

Real Impact: Giggle Academy and Education

One example of meaningful AI use CZ gave was Giggle Academy—his initiative using AI and blockchain to create children’s storybooks. In six months, the platform reached over 220,000 kids in 15 languages. His goal is to educate one billion children using technology, not traditional systems.

Final Thoughts: Build for Utility, Not Hype

CZ emphasized that crypto’s future hinges on utility—not speculation. He urged developers to avoid “99% hype tokens” and instead build tools that matter.

He also reflected on investments like X (formerly Twitter), describing it not just as a tech play but a bet on freedom of speech and economic freedom.