At the World Economic Forum in Davos, Changpeng Zhao, the founder of Binance, unveiled significant discussions with over a dozen governments regarding the tokenization of state-owned assets. This initiative is characterized as the forthcoming evolution in the cryptocurrency landscape, following previous advancements in exchanges and stablecoins.
Zhao emphasized that tokenization has the potential to enhance liquidity across various sectors, such as government bonds, commodities like oil and gold, and public real estate. By facilitating fractional ownership, quicker settlement times, and automated payments through smart contracts, this approach could revolutionize how these assets are managed and traded.
During his address, Zhao outlined three primary sectors for the cryptocurrency industry: tokenization, payment systems, and the integration of artificial intelligence (AI). His assertion signaled a shift from mere speculation in digital currencies to concrete implementations that could redefine financial systems.
He illustrated a future where cryptocurrency operates as a seamless payment infrastructure, with AI agents autonomously conducting transactions. This vision proposes that the visibility of cryptocurrency will diminish as it integrates into everyday financial operations.
Highlighting the urgency behind tokenization, Zhao noted that governments are eager to harness the benefits of their own balance sheets instead of allowing private entities to monopolize this value. By tokenizing national assets, governments can unlock liquidity, gain earlier access to markets, and reinvest proceeds into domestic infrastructure projects.
Recent movements in various jurisdictions reinforce this trend. For instance, Pakistan”s finance ministry is working on plans to tokenize up to $2 billion in domestic sovereign debt, aiming to modernize its debt markets and engage retail investors. Meanwhile, the European Union is advancing its DLT Pilot Regime to create a framework for trading tokenized securities. Even traditional financial institutions are adapting, with the New York Stock Exchange developing a platform for tokenized stocks and ETFs.
In contrast, Zhao expressed skepticism about the longevity of many memecoins, asserting that most are highly speculative and unlikely to survive the test of time. However, he acknowledged that a few, such as Dogecoin, may endure due to their strong cultural foundations.
Looking ahead, Zhao noted that the momentum for tokenization remains robust, with tokenized gold reportedly adding nearly $2.8 billion in net value and experiencing a market cap increase of 177% year-on-year in 2025. This growth underscores the significant shifts underway in the cryptocurrency space.
