Cryptocurrency

Binance Looks To Expand Its Empire: This Time Into Traditional Banking

Binance has made a significant amount of investments in the crypto industry’s growth but its integration into the banking system is on another level. It is considering buying its own bank, Bloomberg reported eariler this week.

Speaking during the Web Summit conference in Lisbon, Portugal, Binance CEO Changpeng Zhao said that the exchange is pursuing the goal of bridging the gap between the crypto world and traditional finance.


Binance Goes After Traditional Finance

CZ did not specify which would be the company’s next steps, but he mentioned that Binance is working on bringing support for those who are more accustomed to traditional finance.

To wit,

“There are people who hold certain types of local licenses, traditional banking, payment-service providers, even banks. We’re looking at those things.”

There has been a movement, in fact, transition towards crypto within financial institutions, in which big banks seek either to integrate crypto services into their offering lists or to be open to talk about that potential.

It’s evident that the accumulation of interest is solely focusing on meeting the growing demand of customers.

However, given the fact that the world is facing an economic slowdown, what banks are doing shows their serious intention toward the nascent sector.

So why not repeat the steps in reverse; this time we may see the crypto giant gets its own bank.


Big Investments

The founder of Binance said last month that the crypto exchange plans to complete the investment of $1 billion on these deals before the end of the year. CZ recently made a $500 million contribution to Elon Musk’s takeover of Twitter.

The company has also invested over $300 million since the year’s beginning. Binance’s intentions instantly made a big impact but it’s not the first crypto entity to explore the benefits of bank acquisition.

Nexo, a Switzerland-based crypto lender, announced in September that it acquired a minor stake in Hulett Bancorp, the bank holding company behind Summit National Bank.

Binance might follow suit or go beyond. The strategy will not only help the exchange uncover revenue opportunities but also help banks get benefits in the share market.

Zhao mentioned that when the cryptocurrency exchange collaborates with a bank, Binance frequently ends up directing a large number of new users to them, which increases the bank’s price.

“What we have found is when banks work with us, we drive so many users to them, so the bank’s valuation goes up exponentially, like why don’t we just invest in them as well, so that we capture some of the equity upside,” he said.


CZ’s View On CBDCs

Unlike his previous skepticism on CBDCs, CZ’s view on the national digital currency has changed. The billionaire said in the summit conference that he didn’t see CBDC as a threat to cryptocurrency.

CZ recently announced in a tweet that Binance and Kazakhstan’s central bank are working on integrating centralized bank digital currency (CBDC) to BNB Chain.

The move came after the crypto exchange got approval from Kazakhstan to work as a platform for digital assets and to offer custody services.

CBDCs will make it possible to conduct transactions, whether domestic or international, in a manner that is both more secure and more efficient, at a lower cost.

Despite the fact that CBDCs are still a fairly novel idea, many of the world’s central banks have indicated an interest in them and are contemplating using CBDCs on a more broad scale.

The progress of CBDCs is gaining momentum as a result of the robust development of a large number of wholesale and retail operations.

More than 88% of CBDC projects that are currently in the testing or production phase use blockchain technology to take advantage of some of the most important benefits offered by this technology, including high levels of security and transparency, as well as a diverse range of programming options.

The post Binance Looks To Expand Its Empire: This Time Into Traditional Banking appeared first on Blockonomi.

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With 5 years of experience as an editor, Matthew has been a crucial part of TheTechly since its inception. He looks after the editing of news content published on TheTechly. Apart from investing his time in editing, he also provides well-researched news articles for the U.S. niche.
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