Binance CEO Changpeng Zhao said that the company is unlikely to buy the banking company, despite the growing concern that crypto companies are paying, including Binance’s own operations in Australia.
The collapse of several US banks this year raised concerns about a shrinking pool of crypto-friendly banks. Early banking partners Silvergate, Silicon Valley Bank and Signature Bank have launched this year.
Meanwhile, on the downside, Binance Australia has announced that it is shutting down its Australian dollar service after its financier decided to end support for the exchange. The exchange has yet to find another provider.
Appearing on the May 29 episode of the Bankless podcast, CZ responded to a question from popular Twitter user DegenSpartan, who jokingly asked, “Can you please buy a bank and make it compatible with crypto?”
“Well, we looked at it,” said CZ, while pointing to the end of the concept:
“The reality is more complicated than the idea. You buy a bank, it only works in one country, and you still have to deal with the bankers in that country. It doesn’t mean you can buy a bank and do whatever you want.
“If the bankers say, ‘Listen, you can’t work in crypto,’ they can take away your license if you do. So buying a bank doesn’t stop the regulators from telling you ‘yeah, you can’t touch crypto,'” he added.
Explaining the issue, CZ argued that even if Binance bought a bank, it would still need “internationally affiliated banks and many US-based correspondent banks.”
“Then the underwriting banks will tell your bank ‘look if you touch crypto, we don’t support your international transactions,'” he said. Another issue is cost, CZ argued, as he suggested that Binance would benefit from having a bank or a network of banks.
“Banking is not cheap. Banks are expensive for small business transactions. […] The amount of capital required is very high, and the regulatory approval for buying a bank is one or more than creating a new bank, which is very expensive,” he said, adding:
“Most banks don’t have strong business models. These are risky businesses. They take the client’s money, lend it, try to make money, and if they don’t get it back, they declare bankruptcy. In many countries, the government will save them, but I don’t like doing these kinds of deals. »
Ultimately, however, CZ said that Binance may make small investments in banks in order to “hopefully motivate them to be crypto-friendly.”
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