CZ: Tokenization Is Key to Speeding Up Global Liquidity and Attracting FDI

Binance founder Changpeng Zhao says tokenization is key to expanding global liquidity and attracting foreign direct investment. In a market update, CZ argued that all assets should be tokenized, citing the speed and flexibility it offers. This approach treats fragmentation as a feature, not a bug, allowing multiple chains to distribute learning curves instead of waiting for one chain to dominate.

CZ emphasized the importance of tokenization in capital formation, particularly for countries looking to raise funds or attract foreign investment. Tokenized shares can be sold to global investors without intermediaries, changing the negotiation with regulators from approving crypto as an asset class to accessing liquidity for state-linked issuers.

While some may see this approach as accepting fragmentation, CZ argues that simultaneous efforts by multiple parties are necessary to expand the industry quickly. He noted that high fungibility between tokens issued by different issuers can partially offset the damage from fragmented liquidity.