This episode of the ARK Invest podcast features an interview with Cathie Wood, founder of Binance, who recounts her entrepreneurial journey from China and Canada to Tokyo, New York, and Shanghai, culminating in the founding of Binance in 2017. The episode also discusses the controversy surrounding the 1011 flash crash. Regarding Binance's founding and her personal experience, CZ stated that Binance's long-term leadership is due to its user protection, global reach, low-cost operations, liquidity network effects, and trust accumulation. On industry trends, she noted that while crypto payments are progressing slower than expected, institutional entry, stablecoin expansion, RWA tokenization, and the on-chaining of traditional assets like gold and oil are exceeding expectations. CZ also discussed how AI agents will drive on-chain transaction growth, intensifying competition among stablecoins. She pointed out that non-USD stablecoins are limited by regulatory costs and bank support, and while quantum computing needs attention, this can be addressed by upgrading quantum-resistant encryption solutions. Finally, the conversation extended to the Bitcoin cycle, with CZ suggesting that while 2026 may be influenced by a four-year cycle, institutional funding, ETFs, stock market performance, and the macroeconomic environment could make this adjustment different from previous ones. The guest's remarks do not represent Wu Shuo's views and do not constitute any investment advice. Please strictly abide by local laws and regulations. Audio transcription and translation were done by GPT and may contain errors. CZ's Background and Path to Founding Binance Lerenzo: CZ, could you briefly review your early experiences and life trajectory before founding Binance in a few minutes? CZ: I was born in China, later moved to Hefei, and immigrated to Canada at the age of twelve, where I spent most of my teenage years. I played a lot of volleyball when I was young, and I did well in my last two years of high school, successfully gaining admission to university, where I studied in Montreal. After graduating, I worked in Tokyo for a few years, then went to New York, where I worked as a development engineer at Bloomberg for four years, gradually rising to become a team leader, managing a team that grew from sixty to about eighty people. In 2005, I returned to Shanghai to start my own fintech company, which lasted until 2013. In 2013, I came across Bitcoin and immediately found it very interesting, so I decided to devote myself to it, leaving my previous company to try different jobs in the Bitcoin and crypto industry. By 2017, I felt the time was right, so I founded Binance. Looking back, we were definitely lucky. At the time, many exchanges were primarily Bitcoin exchanges and didn't support ERC-20 tokens on Ethereum. As a new platform, Binance launched its own token, BNB, which was originally an ERC-20 token, giving us natural support for most ERC-20 assets. Binance grew rapidly. We invested heavily in user protection, server performance, matching speed, and security.Five months after its launch, Binance became the world's largest cryptocurrency exchange by trading volume, a position it has maintained for approximately eight years. Since then, we've weathered multiple market cycles and bear markets. Around 2023, our case with the US Department of Justice entered the processing stage. I personally pleaded guilty to a charge related to the Bank Secrecy Act, and Binance took appropriate action. Ultimately, I was sentenced to four months in prison, and Binance paid a $4 billion fine. Now, I primarily focus on helping entrepreneurs, investing through YZi Labs, and advancing Giggle Academy. I remain active in the industry, continuing to connect with people on X. That's roughly my experience. Cathie: A more complete account of your experience is in your recently published book, Money Freedom. Readers can gain a more comprehensive understanding of your story through this book. CZ: Yes, the book was just published seven days ago. Cathie: You're still working on crypto-related matters; it remains your passion. At the same time, you've also started venturing into other areas, many of which overlap with ARK's areas of focus, such as multi-omics and robotics. I'm also pleased to see you allocating capital in these areas, because these areas, especially in the public market, have long suffered from inefficient pricing. Opportunities are emerging rapidly, and more investors are indeed needed to support the growth of these companies. CZ: Absolutely agree. For me, transitioning from entrepreneur and builder to investor is still a learning process. You have a wealth of experience in this area, and I feel there's a lot I can learn from you. AI, stablecoins, and asset tokenization are rapidly reshaping the Web3 landscape Lerenzo: You've been in this industry for over a decade. Looking back now, what things have progressed slower than you expected, and what has progressed faster? CZ: Many things have been different from what I originally expected. I originally thought that crypto payments should be truly widespread by now, but that's not actually the case. Although there are crypto cards now, and many people use them, merchants don't know they are crypto cards; to them, they are still just Visa or Mastercard. Users can pay with cryptocurrency, but the front-end experience doesn't reflect the large-scale implementation of crypto payments. Another surprise was the speed at which institutions entered the crypto industry, especially the changes in the US market over the past year. A year and a half ago, I thought the US was generally anti-crypto, but then there was a clear shift, which surprised me. However, I also think that because of the repressive policies of the past few years, the crypto industry didn't see particularly strong innovation in the last cycle.Many developers have been sued, and many have flocked to Memecoin, resulting in a lack of truly practical applications. Therefore, I think the current issue is a lack of application-level innovation. I hope that as the US regulatory environment becomes more supportive, we will see more truly useful applications built. Cathie: One thing that surprised us was the rise of stablecoins. Now, with the AI boom, we are seeing a development trend driven by both AI and stablecoins. Do you think AI will become a major driving force for a new round of innovation recovery? CZ: Absolutely. First, AI agents will transact much more frequently than humans, and they are more likely to use cryptocurrencies for transactions than SWIFT or Visa cards. Second, AI will significantly improve development speed, helping the industry build applications faster, more user-friendly and secure wallets, and faster blockchains. So AI will drive industry development at both the application and R&D levels. Also, stablecoins are a direction I didn't anticipate would develop so much. Initially, we all thought it was just a transitional tool, but its scale has far exceeded expectations. There are also some interesting changes, such as the increased trading activity of gold and crude oil on crypto exchanges. This indicates that traditional assets and crypto trading platforms are rapidly merging, and areas like stock tokenization are also growing rapidly. Cathie: Why do you think these trends are developing so quickly? Is it because Larry proposed early on that "all assets will be tokenized," prompting traditional finance to take it seriously? CZ: I think Larry's influence is indeed very significant. He influences not only traditional financial institutions but also world leaders. When the CEO of BlackRock speaks out, the entire market listens attentively. He is also very forward-thinking, anticipating the trend of asset tokenization. I believe we are now seeing an accelerated convergence between traditional finance and the crypto industry. They are essentially the same industry, just using different technologies. Furthermore, Binance now has 320 million users, and these users do have a demand for trading traditional assets. Coupled with the lack of high-quality assets in the crypto market, when tokenized assets become available to global crypto investors, even something as simple as gold, people will trade it. So I think there are both timing factors and the influence of key figures in traditional finance driving the industry's shift. Cathie: Do you think traditional financial institutions are embracing crypto today because it can reduce costs and friction, or because it will create a larger market space? CZ: I think it's both. They've definitely seen the commercial potential.Just look at the trading volume on crypto exchanges and on-chain, and you'll know the market is already there. On the other hand, this technology will indeed reduce fees and costs. In the short term, it may compress profits, but if trading volume increases as a result, the overall business will still expand. So this technology will eventually drive industry fees down further, and players unwilling to lower fees will eventually lose market share. Cathie: Often, traditional industries resist technological disruption. But this time, the financial industry seems to be embracing it proactively. However, the real winners are often the more native companies, because they don't have the burden of two systems: traditional finance and DeFi. How do you think things will evolve next? CZ: It's definitely a balancing act. Some managers of large traditional financial companies are more concerned with short-term performance and bonuses during their tenure, and may not be willing to proactively change. But others will be more focused on the company's long-term development. In contrast, native crypto companies don't have the historical baggage and are naturally more likely to adopt new methods. Private companies are also generally more likely to think long-term than publicly traded companies. But in the longer term, the trend won't change: whoever adopts better technology, whoever can reduce costs and improve efficiency, will win; those unwilling to change will ultimately be impacted. Cathie: More importantly, blockchain and AI are rapidly converging, and AI is developing faster than any previous technology. Therefore, the "if you don't keep up, you'll be left behind" scenario will happen even faster. CZ: Absolutely agree. Change is accelerating, and companies have less time to react. If your CTO isn't considering AI today, they'll soon be left behind; next, if you're not considering blockchain, the same will happen. So I think we'll be at that stage very soon. How Binance Maintains its Leading Position: Global Footprint, Low-Cost Operations, and User Trust Lerenzo: How has Binance maintained its leading position for so many years? There are many competitors in the market, and many of them have substantial resources. So I'm curious, is it due to cultural reasons, organizational structure, or something else? CZ: I think there are several key factors behind this. First, and most importantly, we always prioritize user protection above all else, even above revenue and profit. Whenever a problem arises, our first thought is always to protect users. Second, we have always maintained a more global footprint. The regulatory environment has been very uncertain for the past decade. Many platforms have a relatively clear local market, so they are tied to a certain country.If a country is crypto-friendly, it thrives; if it's crypto-opposed, it suffers greatly. Binance's initial strategy was: in countries opposed to crypto, we withdraw; in countries that support crypto, we invest more. Fortunately, Binance has gained a user base from every crypto-friendly country, resulting in a massive user base. With this scale, we achieve the best liquidity. Better liquidity attracts users because they get better prices and lower transaction costs, creating a network effect. Furthermore, we've consistently kept costs low. While we have some offices, they are small, and we don't have a large headquarters in expensive locations. Most people still work remotely, which helps us keep costs low. I've always wanted Binance to maintain a startup feel, even with a large team. Another point is that trust is crucial in the crypto industry, especially for centralized exchanges. Our long-term industry leadership, large trading volume, and consistently high security build user trust. In contrast, I think some US platforms have excessively high costs and fees. American users often don't have many choices and are limited to using these platforms, which is somewhat like a local monopoly market. But I think the US should open up to global competition. This would lower prices, give consumers more choices, and increase the adoption of crypto assets in the US, which in turn would benefit existing American players. Lerenzo: What are your thoughts on the future development of exchanges? As more assets such as stocks and venture capital shares are put on-chain, will trading platforms evolve into "everything exchanges"? At the same time, new platforms like Kalshi and Polymarket are emerging. What do you think of this direction? CZ: I think many platforms will evolve into "everything exchange platforms" in the future, and this is very likely to happen. For example, Binance has already listed crude oil and gold, and Coinbase and other exchanges will likely make similar moves. As technology develops, a platform will take on more and more functions, and there will be fewer and fewer intermediaries. But at the same time, the market will continue to differentiate. For most ordinary users, centralized exchanges will still be easier to use; only when users are more familiar with the industry, or when self-custodied wallets become simpler and more secure, will more people likely turn to DEXs. So the final landscape will depend on which trend develops faster.Centralized exchanges will grow faster if a large number of new users enter the market quickly; DEXs may grow faster if users enter gradually and mature slowly. The changes in the US are also worth noting. The SEC has released some more positive signals regarding DEX front-end interfaces, and the CFTC is relatively supportive of prediction markets. So I think this sector will develop rapidly in the future. For Binance, we will remain open and develop wherever it is open. I also believe that Coinbase has a good opportunity now. So in the future, it is highly likely that multiple exchanges will coexist for a long time, rather than one dominating. Stablecoin competition will intensify, and the short-term outcome is difficult to predict; non-USD stablecoins are still constrained by cost and adoption rates. Cathie: Regarding regulation and the US market, we are still waiting for clearer guidance, especially regarding "sharing profits with users." What are your thoughts on this? There's a general perception that you have a deep relationship with Tether, or rather, Binance and Tether. We also know that, at least in the short term, Tether is unlikely to share profits. Circle seems to be gradually increasing its market share. What are your thoughts on future developments? CZ: Let me correct something first. There is no business relationship, equity relationship, revenue sharing, or even a commercial contract between Binance and Tether. Binance simply listed Tether early on, and Tether is important to the development of the entire industry. Personally, I believe stablecoins should generate returns for users. Tether is unlikely to do so in the short term, but this leaves room for competitors. Some new stablecoins are already offering returns to users, and there are many ways to do so. Even if regulations restrict direct interest payments, platforms can return value to users through reward mechanisms, account design, or other methods. I don't think this can be completely restricted. Of course, I understand the regulators' concerns; after all, the industry wants to integrate with the traditional financial system, not completely destroy it. But I still believe that, both in the US and abroad, stablecoins that offer good returns and ease of trading will soon emerge, and these products will ultimately prevail. Tether currently dominates, but USDC is also significant, USD1 is growing rapidly, and other stablecoins outside the US are developing rapidly. I believe that any platform that prioritizes users will ultimately win. Whether it's lower fees, more rewards, or higher returns, anything that brings greater benefits to users constitutes a significant competitive advantage. If the US doesn't allow this, then international stablecoins may gain an advantage in the short term.Lerenzo: There's been a concern in the market: if returns are allowed to be distributed to stablecoin users, will it lead to a further flow of deposits from traditional financial institutions into stablecoins? Do you think this concern is reasonable? CZ: I think this concern has some merit. A common model is to place assets in relatively safe places, generating returns through US Treasury bonds or other government bonds. But once you get to the point of "competing for higher returns," someone in the market will keep raising the returns, and higher returns usually mean higher risks. In contrast, banks themselves operate on a fractional-reserve basis, investing most of their deposits elsewhere, making them extremely vulnerable to a bank run. To date, most crypto exchanges, and even stablecoin issuers, generally maintain 1:1 reserves, and some leading institutions are audited. I believe the crypto industry shouldn't break this. Crypto exchanges and stablecoin issuers should maintain 100% reserves. Of course, even so, there are still ways to generate returns, and I actually encourage companies to share these returns with users. But if the law doesn't allow it, then don't do it in that country. But if stablecoins issued in other countries can do this, they will. As long as global users still have access to these stablecoins, more and more people are likely to switch to using them. So fundamentally, users value just a few things: returns, convenience, and security. Cathie: How do you think the stablecoin sector will ultimately evolve? Will this market eventually become a "winner-takes-all" market? CZ: In the long term, it's certainly possible for the market to consolidate at the top, but in the short term, I think fierce competition is more likely than rapid consolidation. For many years, in an overall unfriendly regulatory environment, maintaining bank accounts and managing reserves effectively was a very high barrier to entry. That's why Tether has become so large. But now, that barrier has been significantly lowered. Issuing stablecoins is much easier now; the key is no longer just issuance itself, but adoption rate—how to get users to actually use your stablecoin. This is essentially a matter of marketing, user growth, and ecosystem building. If some projects can offer more attractive incentive mechanisms than Tether, I think they have a chance to succeed. So in the short term, we will see many different stablecoins emerge. And while there's more discussion about USD stablecoins now, many countries also want to issue stablecoins pegged to their own currencies.Because the expansion of dollar-denominated stablecoins essentially strengthens the global influence of the dollar, other countries naturally want their currencies to be used more widely. Furthermore, dollar-denominated stablecoins are typically backed by US Treasury bonds, which provides other countries with an alternative strategy: attracting funds through stablecoins and indirectly supporting their domestic bond markets. Therefore, I believe that more stablecoins from different countries and currencies will emerge in the future. Whether this will lead to a few dominant players in the long term remains to be seen. Stablecoins do exhibit network effects, so consolidation at the top is possible; however, because the barriers to entry have been lowered, many will continue to try in the short term. Lerenzo: So far, we haven't really seen the development of stablecoins denominated in local currencies, i.e., non-dollar currencies. Is the reason for this structural? CZ: Based on my limited understanding, I think the main reason is the high cost. Take euro stablecoins as an example. According to information I've heard from some projects, the cost of developing such stablecoins is quite high. They typically require large insurance arrangements and substantial capital allocation. This is difficult for a startup. Often, you might need to invest hundreds of millions of dollars initially to be able to develop a euro stablecoin, but the market itself is not yet truly mature. Because it hasn't reached scale yet, and most users are already accustomed to using USD stablecoins for transactions, it's essentially a "chicken or egg" problem. As for Mexico, it's likely more of a bank access issue. The situation varies from country to country, with slightly different obstacles encountered in each location. I know many people have tried creating RMB stablecoins, but again, bank support is quite complex. Hong Kong recently issued stablecoin licenses to HSBC and Standard Chartered; we'll see how they develop. However, banks are usually very cautious and slow, so they may not understand the industry or be as close to the ecosystem as native crypto stablecoin projects. So far, these non-USD stablecoins haven't really taken off. This actually gives the USD a significant advantage. Of course, other countries and other monetary systems are also trying to catch up; we'll see how they develop. The threat of quantum computing needs attention, but the crypto industry is not without solutions. Lerenzo: You've had some interesting thoughts on quantum computing before. I know you've also read some papers about "quantum computing threatening Bitcoin." Clearly, we are all in the crypto industry, and Binance itself holds a large amount of crypto assets.What's your take on the timeline of this event? Are we overly worried, or not worried enough? CZ: First of all, I'm not an expert in this field, but I have recently spoken with some technical personnel who are more familiar with this area. My intuition is that cryptocurrencies like Bitcoin will eventually undergo the necessary upgrades. As for what to do with Satoshi Nakamoto's coins, a solution will be found in time. There might be a one- or two-year migration window; if the migration isn't complete by then, the community will likely consider freezing, destroying, or taking other measures before someone actually cracks these addresses. This is more like a matter that requires a community vote. I also think that there's some propaganda involved in the statements from companies like Google. After all, people working on quantum computing naturally tend to emphasize progress. People often overestimate what can be achieved in a year but underestimate what can be achieved in ten years. So I believe that quantum computing is indeed progressing rapidly, but timelines like 2029 are usually more optimistic. This kind of assessment has a marketing element on one hand, but it can also help the industry raise awareness and encourage everyone to prepare in advance. So I think this matter needs to be taken seriously, but there's no need to panic excessively. Stronger computing power is always a good thing, and quantum-resistant encryption algorithms already exist; we just need to migrate to them. So this isn't a problem without a solution; the real issue is coordination. As for who will drive it, I'm not sure. It will most likely be some Bitcoin core developers, but other blockchains might complete the upgrade first. After all, some chains have more centralized governance mechanisms, making progress faster. Perhaps other protocols will act first, and then Bitcoin will follow. Cathie Clarifies "1011 Flash Crash" Cathie: I'd also like to clarify something here. In a previous news program, around the time of the "1011 flash crash," I mentioned Binance. At that time, we knew there had been a software glitch in the market, but Binance wasn't the trigger for that flash crash. I want to make sure everyone understands this: that flash crash wasn't caused by Binance. At that time, tariff-related market turmoil re-emerged, and overall market sentiment was very tense, which may have amplified the volatility, but we believe the impact has largely passed now. CZ: First of all, I'm very grateful that you're willing to clarify this. However, I'm not sure if you know that what you said back then was actually quoted extensively in Chinese media. Cathie: Oh my god, really? CZ: Yes. Many Chinese media outlets were criticizing Binance and 1011's flash crash at the time, and they repeatedly used that video clip of yours.So I'm really glad you've explained this clearly now. Cathie: I had absolutely no idea before, not at all. CZ: Yes, that's what I thought too. When doing podcasts, it's inevitable to say a lot during conversations, and it's impossible to explain all the premises and disclaimers completely. But people often extract and spread certain segments, especially in the Chinese community, which was very obvious back then. But it's okay, I think that's all in the past. Bitcoin may have passed its worst phase, and institutional funds are becoming a new supporting force Cathie: Finally, I'd like to hear your thoughts on the current stage of Bitcoin. Do you think we're still in a four-year cycle? Will this round of increases continue? Are you still bullish on Bitcoin? CZ: I think Bitcoin is currently influenced by two forces simultaneously. On the one hand, the pullback in 2026 still seems to fit the four-year cycle: 2022 was a bear market, 2025 was a bull market, and the adjustment in 2026 also fits this logic. But on the other hand, there are also two positive factors now. First, Trump clearly values stock market performance, and the crypto market typically benefits when the stock market performs well. Second, geopolitical tensions often increase the activity of assets like gold, and I believe Bitcoin will also benefit. Bitcoin previously fell to over $60,000, but has rebounded to around $74,000 to $75,000 in the past few days. If the stock market continues to strengthen, I think this will support Bitcoin and the entire crypto market. The US market has a significant impact on the global crypto market, so I remain quite optimistic and believe this recovery may be faster than before. Of course, this is not investment advice. Cathie: I also believe that one of the important forces supporting Bitcoin right now comes from traditional financial institutions. They have been studying and understanding the four-year cycle and have been waiting for such a correction. At least from our fund flow data, the recent institutional inflows have exceeded most of the past few years. CZ: Your assessment of institutions is very accurate. Most institutions make decisions slowly, usually through committee discussions. But once they start allocating, they don't exit quickly. They might spend a month buying a large position, and then often hold it for many years, so they are essentially long-term holders. As these institutional funds enter the market through ETFs, it will stabilize prices and help drive the market upward. I am very optimistic about this. [Wu Blockchain]