Changpeng Zhao Predicts It’s "Inevitable" for China to Build a Bitcoin Reserve

Abu Dhabi, December 9, 2024 — Changpeng "CZ" Zhao, the former CEO of Binance, shared his views on the future of Bitcoin reserves during his appearance at the Bitcoin MENA conference in Abu Dhabi. He stated that he believes it is "inevitable" for China to establish a strategic Bitcoin reserve, potentially following in the footsteps of the United States.

Zhao explained that while smaller countries might be the first to embrace a Bitcoin reserve, the shift could take time. However, he cautioned that China’s stance on cryptocurrency remains difficult to predict due to the country's lack of transparency in its policies.

China’s Role in the Global Bitcoin Reserve Movement

Zhao, who grew up in China, remarked that the country has the capability to move quickly on policy changes when it chooses to. He speculated that China would eventually accumulate Bitcoin as part of a national reserve, although he had not seen concrete evidence that the government was already hoarding the digital asset.

“I’d be shocked if they announced something and then executed it. I’d be much less surprised if they accumulate and then announce it,” Zhao stated. “They have to do it at some point because it’s the only ‘hard’ asset.”

The Path to a U.S. Bitcoin Reserve

Zhao’s comments come amid growing interest in the idea of countries holding Bitcoin as part of their national reserves. In July, U.S. President-elect Donald Trump proposed the idea of a strategic Bitcoin reserve as part of his campaign promises. Critics argue that such a move would primarily benefit Bitcoin holders by potentially driving up the price if the U.S. government were to purchase and hold as much as 1 million BTC.

However, Zhao believes the U.S. reserve plan is still in its early stages, with the transition expected to unfold gradually. "Trump has not gotten into office yet, and the strategic Bitcoin reserve has not been activated yet," he said, adding that once the U.S. begins its Bitcoin reserve strategy, other countries may follow suit.

Zhao's Perspective on China's Future Bitcoin Policies

Despite the challenges of predicting China’s exact approach to cryptocurrency, Zhao remains confident that China’s eventual move toward Bitcoin reserves is a matter of time. While the Chinese government has been cryptic in its handling of cryptocurrency regulations, Zhao emphasized that the strategic importance of Bitcoin could eventually drive the country to hold significant reserves.

“China can move really, really fast on policy,” Zhao said. “The government may not announce its actions immediately, but I believe it’s inevitable that they will establish a reserve.”

Zhao’s Legal Situation and Future Prospects

The remarks come months after Zhao’s legal troubles in the U.S. In September, he was released from federal prison after serving a four-month sentence for violating anti-money laundering laws. Zhao had pleaded guilty as part of an agreement with U.S. authorities.

Following his resignation as CEO of Binance in November 2023, Zhao is no longer involved in the management of the company. His felony conviction limits his ability to engage in certain business activities, although he hinted that he could receive a pardon from President Trump after taking office in January 2025.

The Global Shift Toward Bitcoin Reserves

The discussion surrounding Bitcoin as a reserve asset highlights the increasing importance of digital currencies in global finance. While it remains unclear which country will take the lead in building a Bitcoin reserve, Zhao’s comments underscore the growing recognition of Bitcoin’s value as a "hard" asset in an increasingly digital world.

As nations continue to explore cryptocurrency as part of their economic strategies, the idea of a Bitcoin reserve could fundamentally alter the global financial landscape, with countries like China likely playing a pivotal role in the shift.