The future of banking for the ever-growing crypto community is a topic that generates a lot of interest and, of course, difference in opinions. Recently, Binance CEO Changpeng Zhao addressed the idea of purchasing a bank as a potential solution to crypto’s disrupted banking relations. His response, which highlighted regulatory complexity and capital requirements, provided insights into the obstacles that the crypto industry might face when trying to establish a close relationship with traditional banking systems.
Binance Australia experienced a halt to its Australian dollar services after its payment service provider ended support for the exchange. This led to the question of whether buying a bank and making it crypto-friendly would resolve the issue. However, Zhao pointed out that owning a bank presents several challenges in the real world. Firstly, if the banking regulators oppose working with crypto, they can still revoke the bank’s license. Secondly, the bank would only function in one country, limiting its reach. Additionally, the corresponding banks that would be required to form a worldwide network are predominantly based in the US, which has its own challenges regarding crypto.
Apart from the regulatory complications, there’s also the matter of cost. Zhao argued that for Binance, owning a network of banks would provide very little business revenue while incurring high capital expenses. Moreover, the regulatory approval required for purchasing a bank is rather onerous. A bank is also a risky business, as they essentially depend on their customers’ money aspects for making revenue through loans. If they can’t get the money they’ve loaned back, they go bankrupt, which isn’t the type of business model that fits well with crypto ventures.
Zhao did mention that Binance might consider making small minority investments in banks to possibly influence them into being more accepting toward cryptocurrencies. While crypto organizations might not be interested in buying out banks, having a stake in their processes could potentially create a more welcoming environment for the coexistence between the two worlds.
In conclusion, it appears that solely relying on buying banks is an ineffective method to address debanking issues in the crypto sphere. As the industry continues to grow, a more sustainable solution should consider a harmonious integration between the rapidly evolving crypto ecosystem and the well-established traditional banking infrastructure.
Source: Cointelegraph
