CZ: Crypto Wallets, Not Exchanges, for Daily Use
Changpeng Zhao (CZ), former CEO of Binance, envisions a future where cryptocurrency wallets become the primary interface for everyday blockchain users, while exchanges primarily cater to professional traders and liquidity providers. This perspective was shared during a recent X (formerly Twitter) discussion with Trust Wallet CEO Eowyn Chen.
Crypto Wallets and Exchanges: Distinct Use Cases
CZ, despite his busy schedule focused on new investment opportunities with YZI Labs (formerly Binance Labs) and contributions to the Giggle Academy, emphasized the differing roles of wallets and exchanges. He highlighted that many people mistakenly use exchanges as wallets, advocating for a clear separation of functionalities. Exchanges, he argues, serve as liquidity pools best suited for large-scale professional trading.
“I don’t think there should be any block in the future. The exchanges should only be for professional traders. Most people should not need to interact with an exchange,” CZ stated.
CZ's perspective reflects a broader industry shift. Wallets are evolving beyond simple storage, incorporating asset management, digital identity features, and payment functionalities, including access to DeFi services.
Eowyn Chen, CEO of Trust Wallet, corroborated this shift, noting Trust Wallet's 200 million downloads, with 77% representing users focused on finance, rather than speculative trading.
“We have almost 200 million downloads, and this is about 77% of the finance registration users. For us, as a decentralized wallet, that’s quite an honor from the user base,” said Chen.
Wallets as Gateways to Digital Identities
CZ further highlighted the potential for wallets to become gateways to digital identities and government services. He suggested that wallets could play a crucial role in governments' adoption of blockchain solutions for secure digital identity systems.
“When governments look at blockchain, the first thing they’re going to need is a digital and decentralized ID solution. For that, you need a wallet. The wallet is kind of like the browser to the internet; they are a key infrastructure,” said CZ.
This discussion comes at a time of increased scrutiny regarding user data and market practices within both the wallet and exchange sectors. Separating these functions, as CZ and Chen suggest, could create distinct user profiles and benefit the overall ecosystem.
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The future of crypto likely involves the convergence of secure wallets, enhanced digital identities, and wider access to decentralized applications. This evolution promises to make blockchain technology more accessible and user-friendly for everyday users.