Binance rules out buying a bank

Binance rules out buying a bank

2023-05-30 17:41:12

Changpeng ZhaoCEO and co-founder of Binance, has assured that buying a bank would not solve any problem for companies in the cryptocurrency sector.

“We have considered it, but the reality is much more complex than the concept. If you buy a bank, it only works in one country and you have to deal with that country’s banking regulators. It does not mean that you can buy a bank and do whatever you want. If bank regulators say you can’t work with ‘crypto’, then they can take away your license if you do. So buying a bank does not prevent regulators from telling you that you cannot touch cryptocurrencies”, he explained in a podcast to a question from a user who asked the company to buy a bank and make it favorable to digital assets.

In fact, Zhao has noted that even if Binance were to carry out such an acquisition, it would still need “peer banks all over the world and most of them are in the US”. “Then the corresponding banks will tell your bank“ look if you touch the ‘cryptos’, we do not facilitate your international transactions ”, he added.

Likewise, Zhao has indicated that Binance would hardly make a profit from owning a bank or a network of banks. “Banks are not cheap. Banks are very expensive for their very little business income. The amount of capital required is quite high, and the regulatory approval to buy a bank is the same or more than the creation of a new bank, which is very onerous”, she has pointed out.

“Many banks do not have very solid business models. They are very risky businesses. They take the customer’s money, they lend it out, they try to make money, and if they don’t get it back, they go bankrupt. In many countries the government saves them, but I don’t like to run that kind of business,” Zhao said.

However, the CEO of Binance has indicated that the crypto exchange yes, it could make small minority investments in banks so that “hopefully influence them to be more crypto-friendly”.

Zhao’s statements come after the problems being experienced by his subsidiary in Australia and other companies in the sector in the oceanic country. Likewise, the bankruptcy of Signature and Silvergate, two banks with a high exposure to ‘cryptos’, after the collapse of Silicon Valley Bank, have left the sector without too many partners on this front.

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