Binance to Buy a Bank? What Does This Mean for Crypto?

Binance, which has been making some huge moves during the bear market, even after the wake of the massive 580 Million dollar Binance hack. Regardless of setbacks, CEO CZ has continued to push partnerships and acquisitions forward at a near relentless pace. Among these is its stake in Elon Musk’s Twitter deal.

Another announcement CZ made in this department is that Binance is setting its eye on more traditional finance routes and isn’t taking a bank purchase off of the table. With over 1 billion dollars in purchasing power, Binance has the capital to make just about any financial moves it chooses. One of the goals pointed out by the Binance leader is to create better integration between traditional fiat assets and digital assets such as crypto. It’s an interesting development in regards to crypto and digital asset adoption. Let’s take a deeper dive into the potential benefits of a Binance-owned bank.

Co-Host of WLRS Crypto Radio, Austin, had a very interesting take on the matter in their latest Macro Show. He stated that he currently holds a Coinbase debit card, but, to use the card, he has to keep USDC loaded in his Coinbase account. While this is not a difficult task, it does have some real-world drawbacks that could make a Binance or other crypto bank a very attractive option.

FDIC Insurance & Crypto?

While the current state of Binance buying a bank is still up in the air, one positive that may come down the road with a crypto-tied bank account is the possibility of FDIC Insurance. FDIC stands for Federal Deposit Insurance Corporation. The FDIC has an important role in the financial ecosystem of banks. A bank that is FDIC insured means that in the event of the bank’s failure, the funds in your account are guaranteed by the FDIC up to $250,000 and in some cases even more than that.

Austin goes on to say that he would love an FDIC insured bank that can hold his USD, USDC stable coins, and other cryptocurrency assets and have that account backed by the FDIC. A creation or acquisition of a bank by a cryptocurrency leader such as Binance could be a right step in that direction.

Centralized Decentralization?

Later in the video, Austin throws in support for CBDCs if they’re able to bring FDIC insured crypto assets to banks. This is a rather controversial topic in the Decentralized Finance (DeFi) space, as many believe CBDCs, or centralized bank digital currencies, would be put in place to take away the financial freedoms DeFi promises investors.

It’s likely we will see CBDCs entering the cryptocurrency space at some point in the near future. It’s a heated debate. In general, you have smaller investors against them as it allows for centralized institutions to potentially track, limit, or completely freeze your funds. Large institutional investors and firms are in favor of them, as to have CBDCs, you need significantly more regulation in the space. Those massive buy orders from institutional investors are likely to cause another significant bull run across crypto. Kevin O’Leary is a well-known supporter of regulation in the crypto space and believed crypto will become the 12th sector of the S&P 500 once regulation and institutional buying kicks in.

This article is from WLRS Crypto Radio, a crypto-focused media network with multiple weekly shows on the crypto and macro-economic space. You can listen to full episodes and get the full scoop on what’s new in the crypto space here.

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