Binance CEO Changpeng Zhao (CZ) expressed skepticism about the effectiveness of acquiring traditional banks to address the ongoing banking challenges faced by Binance and the wider crypto industry. CZ’s comments were made during an interview on the Bankless podcast and come at a time when crypto-friendly banks in the United States have collapsed, along with Binance’s recent difficulties with payment providers in Australia.
Responding to a suggestion from a Twitter user about Binance buying a bank to make it crypto-friendly, CZ explained that purchasing a bank does not guarantee the freedom to operate without regulatory restrictions. He emphasized that if banking regulators prohibit crypto-related activities, the bank’s license could be revoked, regardless of ownership. CZ stressed the importance of complying with banking regulations, regardless of whether a bank is owned by Binance or another entity.
CZ further highlighted the challenges of operating with banks on a global scale, as they often rely on corresponding banks based in the United States. These corresponding banks have the power to restrict international transactions if they disapprove of crypto involvement.
Instead of acquiring a bank outright, CZ suggested that Binance may opt for smaller investments in multiple banks, in the hope that these institutions would become more crypto-friendly with Binance as a minority investor. However, he acknowledged that even such investments would not guarantee uninterrupted crypto support from the banks.
CZ’s stance reflects the complexities and regulatory uncertainties surrounding the integration of cryptocurrencies into traditional banking systems. Binance continues to explore alternative solutions to address these challenges while adhering to regulatory requirements and fostering innovation in the crypto industry.