The Current Financial System Is Broken, Says Binance CEO, Changpeng Zhao
In a recent blog post, the Binance CEO analyzed a corporate culture where CEOs are trained to push for short-term results instead of lasting solutions. According to Zhao, investors rather praise CEOs for being able to push stock prices up and also make much profits on quarterly basis. In his view, he thinks it would be prudent for those investors to praise their CEOs for being able to save cash to build a strong balance sheet to survive a crisis.
However, Zhao said he wouldn’t put much blame on the CEOs, but the broken system within which they operate. He claims the system drives the CEOs to maximize shareholder value with bonuses worth millions of dollars. Hence, when crisis like the current COVID-19 pandemic strikes, many companies are found wanting and struggle to survive.
Zhao noted that, these companies are bailed out by the government through the printing of more money into the system. However, he believes this also have an indirect negative implication on the ordinary taxpayer. He said the taxpayers are robbed and indirectly made poorer but they are not able to complain.
Zhao further noted that, printing of more money saves the banks from failing. He said when the banks fail, the people will be able to directly point out who failed, and this is what the government doesn’t want to happen. He said the government does this to save faces and make everyone happy, except for the poorer retail investors, but since they don’t know anything, they wouldn’t complain.
In the long run, Zhao is bullish on crypto due to the massive money printing by the government. He claims crypto is different since there are no government bailouts, at least not by printing money. Yet, he argued that, most investors wouldn’t turn to crypto even after realizing that the current financial system is broken. In his concluding statement, he urged investors to stop hoarding cash and invest in bitcoin rather.
Featured image courtesy of Fortune. Source: Cryptopress.