Changpeng Zhao, the former Binance chief executive known as CZ, says legacy banks will become obsolete if they keep fighting crypto instead of adopting it. He said it just as JPMorgan’s Jamie Dimon vowed to kill a US crypto bill, and as Binance lines up a contested return to the Philippines through a local partner now tangled in a plunder scandal.
Here is the awkward part. The same compliance plumbing Zhao frames as banking dead weight, the identity checks and money-laundering controls, is exactly what his old exchange once pleaded guilty to neglecting, and exactly what critics fear is thin as Binance reenters Manila through a firm linked to an accused former lawmaker.
Banks Will Go Obsolete, CZ Tells the Holdouts
Zhao’s case against the banks is mechanical, not just rhetorical. He points to centralized ledgers, settlement windows that can stretch across several business days, and the stack of intermediaries and clearinghouses that sit between a payer and a payee. Each layer adds cost and delay, and none of it, he argues, survives contact with a cheaper alternative.
That alternative is blockchain settlement that runs without a closing bell. Public networks offer round-the-clock settlement that clears in seconds rather than days, and smart-contract automation that can push per-transaction fees down toward a fraction of a cent instead of routing value through correspondent banks. For high-volume flows, the math is hard to ignore.
The banks are not going quietly. Dimon, JPMorgan Chase chairman and chief executive, told reporters on Friday, May 29, that his bank would fight the Digital Asset Market Clarity Act (CLARITY Act), the US bill meant to set rules for digital assets. His objection centers on stablecoin issuers paying yield that behaves like bank interest without bank-style safeguards, a setup he warned would “eventually blow up.” As he put it on the stablecoin rewards fight, “The banks will not accept it.”
Strip away the politics and the contrast between the two rails is simple to lay out, which is part of why Zhao keeps winning the rhetorical round even when the policy fight stalls.
| Attribute | Legacy bank rails | Public blockchain rails |
|---|---|---|
| Settlement time | One to several business days | Seconds to minutes |
| Operating hours | Business hours, weekday clearing | 24 hours, 7 days a week |
| Per-transaction cost | Multiple intermediary fees | Fraction of a cent on automated transfers |
| Built-in identity checks | Mandatory AML, BSA and KYC layers | Optional, depends on the venue |
You can read the text and status of the Digital Asset Market Clarity Act on the US Congress record, where the bank lobby’s fingerprints on the stablecoin language are now plain.
The Rules CZ Calls Friction Catch the Dirty Money
Look closely at that last table row, because it is where the obsolescence pitch turns on itself. The friction Zhao treats as banking’s dead weight, the anti-money-laundering (AML, the program that flags suspicious flows) checks, the Bank Secrecy Act (BSA, the US law requiring financial firms to report and deter laundering) duties, and know-your-customer (KYC, the identity verification every regulated bank runs) rules, exists precisely to stop criminals from moving illicit cash through the financial system.
Binance knows the cost of skipping it better than almost any firm alive. In November 2023, the exchange agreed to a $4.3 billion resolution with the US Justice Department, forfeiting just over $2.5 billion and paying a criminal fine of more than $1.8 billion. Zhao personally pleaded guilty to failing to maintain an effective anti-money-laundering program in violation of the BSA, paid a $50 million fine, resigned, and later served prison time before being pardoned in October 2025.
Dimon’s pitch in Washington is now the mirror image of Zhao’s. If crypto firms take deposits and pay yield like banks, he argues, they should carry the same AML, BSA and KYC obligations as banks, a position Senator Elizabeth Warren has pressed in parallel through her demand for records on nine federal crypto trust charters. The full settlement terms sit in the Justice Department’s resolution announcement on the Binance guilty pleas.
Binance’s Manila Return Runs Through a Sandbox
The Philippine comeback is structured to look like the opposite of 2023. Rather than serving Filipino users directly, Binance is supplying technology and compliance support to BlockShoals Technologies Inc., a Manila-incorporated firm that holds the actual license and operates inside the Philippine Securities and Exchange Commission (SEC) Strategic Sandbox, branded StratBox, under Memorandum Circular No. 9, Series of 2024.
That structure matters because the last exit was ugly. The SEC flagged Binance as unregistered in 2023, and the National Telecommunications Commission (NTC, the agency that controls network access) moved to geo-block its apps and sites. This time the regulator is inside the tent, with a defined testing window the SEC’s sandbox program for digital-asset services caps at 24 months.
- 2023 – The SEC flags Binance as unregistered; the NTC moves to geo-block its platforms.
- November 21, 2025 – The local partner secures in-principle approval from the Commission En Banc.
- April 14, 2026 – A Notice to Proceed clears it to operate as a Crypto Asset Intermediary under the 2024 circular.
- May 26, 2026 – Binance and the firm announce the tie-up under StratBox.
- Second half of 2026 – Sandbox testing begins with a 90-day integration to a licensed virtual asset service provider (VASP, a regulated crypto operator) before user onboarding.
The Romualdez Question Hanging Over BlockShoals
The cleaner structure has not silenced the alarm. The Bilyonaryo News Channel reported that the venture is led by chief executive Nicholas Anthony Te, son of Philippine Stock Exchange (PSE, the country’s main bourse) director Anthony Te, and that the corporate ties run further than a single family.
According to that reporting, the elder Te sits on the boards of Marcventures Holdings and Benguet Corporation, firms publicly associated with Martin Romualdez, the former Speaker of the Philippine House of Representatives. The overlap is what put the partnership under a cloud almost as soon as it was announced.
Romualdez is the subject of a government plunder probe over alleged kickbacks from public infrastructure projects, with investigators citing nearly $1 billion in suspected ill-gotten wealth. That arithmetic is what fed the speculation: a politician facing laundering-adjacent accusations, a fresh set of crypto rails, and a comeback that just happens to route through a connected firm.
This partnership demonstrates that global digital-asset platforms and local regulatory frameworks can work together constructively. As a Philippine-incorporated company under SEC supervision, we’re focused on building a secure and locally accountable platform for Filipino users.
That statement came from a BlockShoals representative, which has flatly denied the implication. The company says Romualdez holds no direct ownership interest, that it is controlled by the Te family through MNM Capital OPC with a 60 percent stake, and the public record does not establish that the former Speaker controls it.
Where the Obsolescence Thesis Has Legs
Strip out the noise and Zhao has a real point buried under the bravado. Tokenized real-world assets (RWA, traditional instruments issued as blockchain tokens) have climbed to more than $30 billion sitting on public blockchains by mid-2026, with BlackRock, JPMorgan and Franklin Templeton among the institutions building on-chain. The banks are not vanishing; they are quietly rebuilding on the rails Zhao says will replace them.
What blockchain settlement actually removes from the bank stack is narrow but real:
- Multi-day settlement lag on cross-border value transfer
- Layers of correspondent banks and clearinghouses taking a cut
- Fixed market hours that idle capital on nights and weekends
- Fat per-transaction fees on small and frequent transfers
The honest read is absorption, not extinction, a pattern this site has tracked as banks moving onto tested crypto infrastructure rather than being swept aside by it. You can watch the tokenization numbers move in near real time on the analytics dashboard tracking tokenized real-world assets.
If the Manila sandbox runs clean for its full window, Zhao’s bet on crypto out-running the banks gets a proof point in a market of more than 110 million people. If the Romualdez questions harden into a finding, the comeback becomes the case study Dimon will cite for why the old controls were never just friction.
Frequently Asked Questions
Is Binance Legal in the Philippines Now?
Not yet in the open-market sense. Binance is supplying technology to BlockShoals Technologies, which holds the license and operates inside the SEC’s StratBox sandbox. Public user onboarding only begins after a 90-day integration with a licensed local VASP is completed.
When Can Filipinos Use Binance Again?
The sandbox testing phase is expected to start in the second half of 2026 and run for up to 24 months. Users will be onboarded through the local partner only after the initial integration period clears, so a firm public-access date has not been set.
What Is the SEC’s StratBox Sandbox?
StratBox is the Philippine SEC’s Strategic Sandbox, created under Memorandum Circular No. 9, Series of 2024. It lets fintech firms live-test products under direct regulatory supervision for a capped window of up to 24 months before any wider rollout.
Why Did Binance Leave the Philippines in 2023?
The SEC flagged Binance as an unregistered operator offering securities without a license, and the National Telecommunications Commission moved to geo-block its apps and website. The new structure routes activity through a locally licensed intermediary to avoid that problem.
Disclaimer: This article is for informational purposes only and is not investment, legal or financial advice. Cryptocurrency and digital-asset activity carries significant risk, including the loss of capital and exposure to regulatory and compliance uncertainty. Readers should consult a qualified financial or legal professional before acting. Figures and dates are accurate as of publication.
