Binance is making headlines again, but not thanks to its usual regulatory woes. The crypto exchange giant announced the launch of Bifinity, a payment tech company, and Binance’s “official fiat-to-crypto payments provider.”
This admittedly looks like a standard industry update, but in reality, the new company is a huge litmus test for the controversial crypto exchange – and those struggling to regulate it.
Hold the front page!
Bifinity is meant to support more than 50 cryptos, as well as Visa and Mastercard, for payments. What’s more, to explore the Web 3.0 payments market, Binance announced its partnership with the UK-based Paysafe. In its official release, Binance stated,
“Additionally, Paysafe will provide Bifinity with a deep regulatory know-how of fiat-to-crypto payments and an embedded finance solution that acts as a white label digital wallet.”
The crypto exchange also revealed that Binance and Paysafe would “fully reopen EUR and GBP deposits and withdrawals” through the SEPA payment network and Faster Payment Services. With the crypto exchange reaching its hand deeper into the fiat market, watchdogs are getting worried.
UK Regulators: shaken and stirred
If Paysafe sounds familiar to you, then you’ve been keeping up with the news. Binance’s deal with the company set the UK’s Financial Conduct Authority [FCA] on edge, as the regulator worried about the exchange giant being able to access UK payment networks and data.
However, the FCA’s response left critics reeling. A spokesperson was quoted as saying,
“Our concerns about Binance remain. We received a notification of this business partnership but have limited powers to object to arrangements of this kind.”
In short, if the Binance x Bifinity x Paysafe project goes ahead smoothly, it will be a stunning victory for Binance and a stinging loss for those seeking to curtail the exchange’s global influence.
However, there are other possible outcomes.
Elephant in the room
Binance’s push into the payments market comes as the Russia-Ukraine war rages on, during a time when regulators and world leaders are eyeing crypto exchanges more closely than ever before. Binance has so far resisted calls to slam all Russian users with a blanket ban. But pressure is mounting and Binance has always prided itself on compliance.
Adding to that, Coinbase announced blocking over 25,000 addresses linked to Russian users or illicit actors and handed over their information to the government. Now, watchdogs are expecting Binance to follow suit.
If not, regulators might decide that it is high time to snap back and re-establish their authority.
And one flew over the Atlantic
Another crypto exchange giant, FTX, announced the formation of FTX Europe in order to expand operations and formally enter the European and Middle Eastern markets.
CeFi investors will be following the progress of both exchanges, to see how their ventures fare outside of the American payments market.