Binance CEO Buying a bank won’t solve crypto’s debanking issue

The CEO of Binance, Changpeng Zhao, has stated that the company is unlikely to purchase any banking institutions, despite growing concerns of crypto companies being debanked, including Binance’s own operation in Australia. The collapse of several US banks this year has raised concerns that the pool of crypto-friendly banks is shrinking, as former key banking partners Silvergate, Silicon Valley Bank, and Signature Bank have all capitulated this year. Meanwhile, Binance Australia has suspended its Australian dollar services after its payment provider ended support for the exchange. The exchange has yet to find an alternative provider.

UPDATE – We have confirmed with our local payment partner that our users can continue to withdraw AUD via bank transfer until 17:00 June 1, 2023 AEST. Users can still continue to buy and sell crypto via debit and credit card. We are working hard to find an alternative provider…

— Binance Australia (@Binance_AUS) May 22, 2023

During a Bankless Podcast episode on May 29, CZ responded to a question from DegenSpartan, who humorously asked if Binance could buy a bank and make it crypto-friendly. CZ explained that buying a bank was more complex than the concept, as buying one bank would only work in one country, and the firm would still have to deal with the banking regulators of that country. Even if Binance bought one bank, it would still need corresponding banks all over the world, and most of the corresponding banks are in the US. Additionally, banks are expensive, and the amount of capital required is quite high, and the regulatory approval for buying a bank is the same or more as setting up a new bank, which is very onerous.

CZ stated that Binance may make small minority investments into banks so that it can hopefully influence them to be more crypto-friendly.