- Binance’s Changpeng “CZ” Zhao says that purchasing a bank would not be a solution to the crypto debanking issue.
- He cites the regulatory environment and need for a network of banking providers as key hurdles.
- Binance Australia was recently forced to halt AUD deposits amid a banking provider’s decision to stop the service.
Binance CEO “CZ” Changpeng Zhao has expressed doubt that acquiring banking institutions would offer a solution to the growing trend of banking problems for crypto companies.
According to the Binance CEO, while this is something they previously looked at, they don’t see it as a path that offers a solution to crypto. And it’s not as easy as it may sound, he said as he highlighted issues to do with policy and regulation.
Binance CEO on why they haven’t acquired a bank yet
CZ was commenting on the issue of crypto banking partners during an episode of the Bankless Podcast on Monday. The sentiment comes just a few days after the exchange said it was looking for a new banking partner for its subsidiary Binance Australia.
As Naijaonpoint.com.ng reported here, Binance Australia announced it had been forced to halt AUD deposits after a banking partner said it could not continue with the service. The remarks also come a few weeks after a tumultuous period for US banks and the collapse of crypto-friendly banks Silvergate and Signature Bank.
It meant a significant dent on the crypto-friendly banks landscape is now firmly in place. But why can’t a crypto giant like Binance just acquire one of the banks and “make it crypto-friendly?”
Zhao explained, “The reality is much more complex than the concept. You buy one bank, it only works in one country, and you still have to deal with the banking regulators of that country. It doesn’t mean you can buy a bank and do whatever you wanna do.”
According to him, buying a bank won’t stop regulators from telling you not to touch crypto. Also, even if Binance were to acquire a bank, it would still need to work with corresponding banking partners across the globe. Many of these banks, which operate from the US, could still halt their services given Binance offers crypto-related products and services.
Binance isn’t also looking to buy a bank because of the costs involved and the fact that the business model has very little profit.
“Many banks don’t have very sound business models. They’re very risky businesses. They take the customer’s money, loan it out, try to make money, if they don’t get it back, they declare bankruptcy. In many countries the government will save them, but I don’t like to run those kinds of businesses,” he noted.
But while Binance may not buy a bank, it has plans to invest in several banks as part of a strategy aimed at making such providers more crypto-friendly.
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