Binance is not Looking to Buy a Bank, CZ Outlines Cons

Binance CEO, Changpeng Zhao, believes that owning a bank and making it crypto friendly won't be any benefit.

According to the latest articles, Changpeng Zhao, the chief executive officer of Binance, claims that the company has no plans to acquire any banking institutions.

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Crypto Companies are Being Debanked

This statement from the Binance CEO comes amid the fear of many companies focused on crypto being debanked which includes Binance’s own operation in Australia, as a result of the failure of numerous US banks this year. 

Recently, Silvergate, Silicon Valley Bank, and Signature Bank—all former significant financial partners of crypto firms—have filed for bankruptcies.

Binance CEO Points Out Disadvantages of Owning Banks

The Binance executive responded to a question from well-known Twitter user DegenSpartan on an edition of the Bankless Podcast that aired on May 29. DegenSpartan asked: “Can you please, buy a bank and make it crypto-friendly?”

“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,” CZ replied.

Banks are Risky Businesses: Binance CEO 

The Binance CEO added that “if the banking regulators say, ‘look you can’t work with crypto’ then they can take your license away if you do. So buying a bank doesn’t prevent regulators from telling you ‘no you can’t touch crypto.’” 

“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,” CZ said.

Expansion of Operations

Recently, the Thai Ministry of Finance granted various licenses to Gulf Binance, a joint venture between Binance and Gulf Innova. 

Additionally, the leading exchange is now in the process of establishing a brand-new, fully authorized subsidiary in Japan. The biggest cryptocurrency exchange in the world is currently preparing to establish a subsidiary company in the UK in order to comply with legal regulations.

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