Binance co-founder CZ backs crypto license passporting across ASEAN

I have spent a lot of time talking to founders who are exhausted by the circular logic of modern regulation. You want to build a product that serves a global audience, but you spend 40% of your seed round on lawyers just to get permission to exist in one specific zip code. It is a massive drain on innovation, and frankly, it is the biggest hurdle for anyone trying to build something meaningful in the crypto space today.

This is why the recent comments from Binance co-founder Changpeng Zhao regarding the ASEAN region caught my attention. CZ is pushing for a concept called license passporting. For those who aren't familiar with the term, it is essentially a reciprocity agreement between nations. If you get a license to operate in one member state, that license acts as a golden ticket, allowing you to operate in all the others without having to restart the application process from scratch.

In the context of the Association of Southeast Asian Nations, we are talking about ten different countries with vastly different legal frameworks, cultures, and economic maturity. Trying to launch a crypto startup across Indonesia, Vietnam, Thailand, and Singapore simultaneously is currently a nightmare of redundant paperwork. CZ is arguing that a unified passporting system would simplify these approvals, slash the cost of compliance, and ultimately let the best products win based on their utility rather than who has the biggest legal budget.

The Multi-State Friction Problem

As a founder, your most precious resource isn't capital; it is time. The current fragmented landscape of crypto regulation is a time-sink. If you want to operate in Southeast Asia right now, you have to navigate a maze. Singapore has its Payment Services Act. Thailand has its own SEC regulations. Indonesia has Bappebti. Every time you cross a border, you are hiring new local counsel, translating your whitepapers, and re-submitting the same KYC/AML protocols to a new set of bureaucrats who mostly want to justify their own existence.

This fragmentation creates a massive moat for incumbents. If you are a giant exchange with a billion-dollar war chest, you can afford to play the long game and collect licenses like Pokémon cards. But if you are a small team building a new decentralized lending protocol or a niche payment bridge, the cost of entry is prohibitive. You end up picking one market and staying there, which limits your network effects and stunts your growth.

Passporting would change the math. By creating a standardized set of requirements that all ASEAN members agree upon, a startup could theoretically go through a single rigorous vetting process. Once they pass, they gain access to a combined market of over 600 million people. That is a game-changer for scale.

Why Regulators Hate (and Need) This

From a skeptical founder's perspective, I know why this hasn't happened yet. Regulators are naturally territorial. They don't like the idea of another country's agency deciding who can operate within their borders. There is a fear that if one country has "softer" rules, it will become a backdoor for bad actors to flood the entire region. This is the race to the bottom argument that we see in every financial sector.

However, the alternative is worse. When regulation is too fragmented, builders just go where the friction is lowest, or they operate in the shadows. By creating a unified framework, ASEAN regulators would actually gain more oversight, not less. It allows for better data sharing on fraudulent actors and creates a level playing field where security standards are high but consistent.

CZ's backing of this isn't just altruistic, of course. Binance has faced its own share of regulatory blowback globally. A passporting system would make their lives easier too. But even if you don't like the big players, you have to admit that a streamlined process benefits the guy building in his garage just as much as it benefits the exchange with thousands of employees.

What This Means for Technical Founders

If you are building in the AI or crypto space right now, you need to be watching these geopolitical shifts closely. We are seeing a move away from the "move fast and break things" era into the "move fast and be compliant" era. The problem is that compliance is often built on legacy foundations that don't understand the speed of software development.

A passporting system implies a move toward code-as-law, or at least standardized reporting. If ten countries agree on a standard, that standard eventually becomes a set of APIs. Imagine a world where your compliance reporting is just a push to a shared ASEAN regulatory node. That is the kind of efficiency we should be aiming for. It turns a legal headache into a technical requirement.

Moreover, it encourages competition. When the cost of switching markets drops, builders have to compete on the actual quality of their product. You can no longer survive just because you were the only firm with the patience to wait two years for a specific local permit. You have to be better than the guy in the next country over who can now compete for your customers with the click of a button.

The Skeptic's Takeaway

Is this going to happen overnight? Absolutely not. The political will required to get ten sovereign nations to agree on financial standards is immense. We have seen how difficult this was for the European Union, and even they still have friction points. There will be pushback from local banks who want to protect their monopolies and from politicians who want to appear "tough on crypto" for their local constituencies.

But the conversation itself is a sign of maturity. We are moving past the phase where crypto is just seen as a speculative casino. Leaders are starting to talk about it as a foundational economic infrastructure that requires a scaled, cross-border approach. For builders, the takeaway is clear: start thinking about your architecture in a way that is portable. Don't bake yourself into a single regulatory corner. Build systems that can adapt to high standards, because the walls between these markets are starting to show cracks.

We don't need fewer rules; we need smarter, more unified ones. If Southeast Asia can pull off a passporting system for crypto, they will leapfrog the West and become the undisputed hub for the next generation of financial technology. And as a founder, that is probably where you’ll want to be.

Read the original at Cointelegraph →