Binance has changed its mind, it won’t buy a bank after all. Czechoslovakia highlighted examples such as regulatory complexity and capital requirements.
Binance CEO Changpeng Zhao said the company is unlikely to acquire banking institutions, despite growing concerns about crypto companies being unbanked, including Binance’s operations in Australia.
The collapse of several banks in the US this year created an avalanche, with fewer and fewer banks willing to work with crypto companies. Former major banking partners Silvergate, Silicon Valley Bank and Signature Bank gave up this year.
Meanwhile, Binance Australia has announced that it will discontinue its services in Australian dollars after the payment provider decided to end support for the exchange. The exchange has not yet found an alternative service provider.
the On the May 29th episode of Bankless Podcast, CZ He answered a question from popular Twitter user DegenSpartan, who humorously asked: “Can you buy a bank and make it crypto-friendly?”.
“Well, we already considered that.” Outlining the boundaries of this line of thought, CZ said:
“The reality is more complicated than the idea. You buy a bank, it only operates in one country, and you still have to deal with the bank supervisors in that country. That doesn’t mean you can buy a bank and do whatever you want.”
“If banking regulators say ‘Look, you can’t handle cryptocurrency,’ they can take away your license if you do. So buying a bank doesn’t stop regulators from telling you ‘no, you can’t touch cryptocurrency’.” he added.
Taking the case further, CZ argued that even if Binance did buy a bank, it would still need other banks to help with international transactions.
Another issue is the cost. According to CZ, Binance will not be able to profit from a bank or banking network.
“Banks are not cheap. The amount of capital is very high and the regulatory approval required to buy a bank is the same or more than to set up a new bank, which is very stressful.” – Then add:
“Many banks don’t have a very stable business model. This is a very risky business. They take customers’ money, lend it, try to make money, and if they don’t get it back, they file for bankruptcy. In many countries, the government bails them out, but I don’t like managing this kind of Business “.
