Catenaa, Friday, August 28, 2026- Binance founder Changpeng Zhao has urged governments to use asset tokenization to raise capital and attract foreign investment, while warning that distributing assets across multiple blockchains could fragment market liquidity.
Zhao, widely known as CZ, made the argument in a social media post Thursday, according to BeInCrypto, whose report was republished by Mitrade.
He said countries and companies could use tokenized equities to reach investors globally rather than relying only on conventional domestic market infrastructure.
The argument builds on recommendations Zhao made in June, when he encouraged governments to move stock markets onchain and consider national stablecoins.
His latest comments add a qualification.
Zhao supports tokenization across multiple blockchain networks, but said that approach can leave liquidity divided between different issuers and ecosystems.
He said stronger interchangeability between issuers could help reduce that problem.
Zhao framed tokenization as more than a technology upgrade for securities markets.
His argument is that putting assets on blockchain networks could give companies and governments access to a larger international investor base.
A company whose shares are tokenized could potentially make those assets available through blockchain-based markets accessible across borders and outside conventional exchange hours.
For governments, that could create another channel for attracting overseas capital.
Zhao specifically linked that possibility to foreign direct investment, or FDI, according to BeInCrypto.
The concept is particularly relevant to emerging markets where domestic capital markets may be smaller or less accessible to international investors.
Tokenization could lower some operational barriers by representing securities digitally and allowing ownership to move through blockchain infrastructure.
It would not eliminate securities laws, foreign ownership restrictions or currency controls.
Any government using tokenized assets to attract overseas investment would still have to address those rules.
The potential drawback is fragmentation.
If the same economic asset, or similar versions of it, is issued across several blockchain networks, buyers and sellers can become divided among separate pools.
That can weaken liquidity and make trading less efficient.
The concern is already being discussed by some of the world’s largest financial market infrastructure providers.
Clearstream, DTCC and Euroclear warned in March that fragmentation across distributed ledger networks could restrict asset mobility and market liquidity.
The three firms, working with Boston Consulting Group, said interoperability would be needed if tokenized securities are to operate across networks at institutional scale.
Their report identified common standards for ownership, asset movement, ledgers and regulatory compliance as areas where markets need greater compatibility.
Without such links, digital securities can remain trapped in isolated blockchain environments.
That mirrors the problem Zhao highlighted.
More blockchains can increase competition and experimentation, but they can also divide investors and trading activity.
Zhao said he still favors multiple participants developing tokenization infrastructure rather than forcing activity onto one blockchain.
His proposed answer is greater interchangeability.
That could allow tokenized assets or their representations to move more easily between issuers, networks and trading venues.
Institutional market operators are pursuing a similar objective.
DTCC, Clearstream and Euroclear said interoperability could preserve asset mobility, liquidity, security and fungibility as tokenized markets expand.
The issue is becoming more immediate as tokenization moves beyond experiments.
DTCC said in July that it had processed U.S. trades using securities converted into tokenized assets, ahead of a tokenization service scheduled for October.
The development shows traditional market infrastructure is also moving toward blockchain settlement rather than leaving the field entirely to crypto-native firms.
Zhao’s comments carry added interest because he has increasingly engaged with governments on digital asset policy.
He has advised Kyrgyzstan on blockchain and Web3 strategy, while also participating in digital asset policy discussions in Pakistan.
In June, Zhao said he had met government leaders and regulators in Asia and was encouraging countries to tokenize equities and develop blockchain-based financial systems.
His latest argument places capital formation at the center of that pitch.
Instead of viewing tokenization mainly as a way to trade existing securities faster, Zhao is presenting it as a way for countries to expose domestic assets to global pools of capital.
The challenge is ensuring those pools remain connected.
If governments, exchanges and issuers build incompatible blockchain markets, tokenization could reproduce the same divisions it is intended to remove.
The contest therefore may not be simply about which country tokenizes assets first.
It may increasingly depend on whether those tokenized markets can communicate, transfer assets and share liquidity across blockchain networks.
