CZ’s push for DeFi takes center stage at Token2049

Speaking at the Token2049 event in Dubai, Changpeng Zhao spilled the tea on crypto regulation and setting up national crypto reserves via his new found love for consultancy.

During a wide-ranging fireside chat with Raoul Pal at the Token2049 conference in Dubai, held on April 30, CZ gave advice on countries seeking his guidance on handling crypto. He also reiterated his call for creating AI agents with real utility and said that crypto will become the go-to currency in the AI-driven economy.

According to CZ, countries approaching him typically want to keep crypto infrastructure localized, from wallets to custody and order books. However, CZ says that this is not optimal because setting up secure custody solutions to manage billions of dollars “requires a lot of funds and expertise, which is lacking.”

CZ explained that establishing localized solutions for every country is impractical. “For each cold wallet, you need about 15 signers,” he said. “You can’t find 15 signers that are not public, that are extremely trustworthy in different parts of the world, in different geographies. They’re not incentivized by more money. They have a steady job, they’re high income, they have a nice family. You just can’t find a hundred times more of those 15 people.”

The same goes for order books, exchanges and other nodes in the crypto ecosystem.

“If you divide each country with their own order book, liquidity is going to suck,” CZ reiterated. During extreme volatility, localized exchanges, wallets or order books may see even wilder swings given that many will invariably handle less volume.

CZ also talked about countries that are exploring crypto as part of their strategic reserves, highlighting Bhutan as a standout example. Bhutan, led by a forward-thinking king, has surplus clean energy and has been using it to mine Bitcoin, making the country an early and smart adopter of crypto for national wealth and sustainability.

As for countries that are yet to jump on the crypto reserve bandwagon, CZ said that they should act sooner, because they may have to buy at much higher prices later. He recommends that governments starting with modest allocations use professional custody solutions and move to more secure cold storage as their holdings scale.

Another key takeaway from CZ’s talk was his call to redirect focus toward building AI agents with real utility rather than flooding the market with useless AI tokens, a sentiment he has expressed in the past.

“Today there are so many different AI agents with a token, but the agents don’t have any real utility,” he said. “I want to see real agents that can actually help you — with tokens that serve a purpose.” He criticized the rise of AI token launchpads that let anyone mint a token-backed AI agent with the click of a button. “That token is useless — 99.99% of them are useless,” he said.

However, CZ believes that “it’s all going to change,” with AI poised to radically transform how people engage with the blockchain ecosystem thereby driving crypto adoption. “The currency for AI is crypto,” he said, arguing that traditional payment methods won’t work in the AI economy. “AI is not going to swipe a card or get an SMS code. That doesn’t work for AI. It’s going to be crypto.”