CZ at Davos: Crypto Will Shrink Physical Banks Over Next Decade

Changpeng Zhao (CZ), co-founder of Binance, described a financial system in transition during the World Economic Forum in Davos in 2026.

He pointed to structural shifts affecting both cryptocurrency markets and traditional banking. Speaking at the New Era for Finance roundtable, CZ addressed unresolved challenges in crypto adoption, the speculative nature of emerging assets, the gradual decline of physical banking, and the limits of global financial regulation.

Key Points

• Digital assets such as Bitcoin have not yet achieved widespread adoption for everyday payments.
• Traditional payment systems are integrating cryptocurrency infrastructure to enable hybrid crypto-fiat transactions.
• Speculative activity is high across memecoins, Bitcoin-based payments, and traditional banking products.
• Physical bank branch networks could decline over the next decade as digital finance expands.
• Liquidity stress in financial markets is linked to fractional reserve banking, not inherently to faster technology or lower transaction costs.

Payments Remain a Challenge, but Integration Signals Progress

Despite years of development, CZ said digital assets such as Bitcoin have yet to gain widespread traction for everyday transactions. Although multiple industry efforts have attempted to bridge this gap, adoption has remained modest.

However, that dynamic may be changing. CZ noted that traditional payment systems are increasingly integrating cryptocurrency infrastructure. In some cases, consumers can pay with standard debit or credit cards, and settlement occurs using cryptocurrency balances behind the scenes. Meanwhile, merchants continue to receive fiat currencies such as dollars or euros.

This hybrid model, he explained, reduces friction on both sides. Consumers avoid the technical complexity of direct crypto payments, while merchants are shielded from price volatility. As these systems mature, CZ expects meaningful growth in crypto-enabled payments.

Speculation Risks Span Crypto and Traditional Finance

While highlighting growth opportunities, Changpeng Zhao also warned about heightened speculation across financial markets. He said uncertainty remains high not only in memecoins but also in Bitcoin-based payment models and traditional banking structures.

To illustrate the risk, he compared memecoins to non-fungible tokens, which experienced a surge in demand before activity declined sharply. He suggested a similar pattern could emerge for many memecoins.

Still, CZ acknowledged that some tokens may endure. Assets with strong cultural visibility could retain relevance longer than others. He cited Dogecoin as an example, pointing to its longevity and sizable market capitalization. Even so, he emphasized that most memecoins struggle to develop durable use cases.

Digital Finance Is Gradually Redefining Physical Banking

From market behavior, CZ shifted to the future of banking itself. He predicted a gradual decline in traditional bank branch networks over the next decade, driven by advances in blockchain technology and digital finance.

Banks, he said, will not disappear, but their function is evolving. As customers increasingly manage finances online, the need for in-person services continues to decline.

To support this view, CZ referenced early adopters of digital banking, including ING, which embraced online-first models decades ago. He also highlighted electronic identity verification as a key enabler, further weakening the rationale for maintaining extensive branch networks.

Regulation Faces Structural Constraints

Turning to regulation, CZ acknowledged the difficulty of coordinating rules across jurisdictions. National differences, he said, make the creation of a single global regulatory framework unrealistic.

As an alternative, he proposed a “regulatory passport” system, under which licenses granted in one country could receive recognition elsewhere. He described this approach as more practical than establishing a centralized global authority.

CZ concluded by addressing concerns about financial stability. He argued that faster technology and lower transaction costs do not inherently increase systemic risk. Instead, he attributed liquidity stress to the fractional reserve banking model, a distinction he said is often overlooked in debates about financial innovation.