#Binance #crypto2023 #bank #bearorbull
The challenges faced by crypto companies in finding banking partners have been an outgoing issue. For instance, Binance has issued a statement saying withdrawals and deposits of pound sterling will be withdrawn. However, users will be able to access their funds. The issue is due to the UK's unfavourable law system making it challenging for Binance's payment provider to operate in Britain. The crypto industry relies on banks to accept dollar deposits and make payments. However, many banks have been reluctant to work with crypto companies due to the perceived risks. Two US banks, Silvergate and Signature, had become important partners for the crypto industry by offering real-time payments outside of traditional banking hours. However, both banks have recently closed due to overexposure to the ailing crypto sector and a liquidity crisis triggered by a sudden flood of withdrawals. While crypto companies have long sought to distance themselves from traditional finance, they still rely on banks to accept dollar deposits and make payments. However, many banks have been reluctant to work with crypto companies due to the perceived risks.
The recent collapse of three crypto-friendly banks has left many blockchain-linked firms without banking partners and few alternatives. Two of these banks, Signature Bank and Silvergate Bank, were known for their longstanding relationship with the sector. Many crypto exchanges quickly had to find new ways of getting money on and off their platforms, while others sent funds to offshore banks that were seemingly more willing to do business.
Circle Internet Financial Ltd., which operates the USDC stablecoin, was particularly affected by the collapse of Silicon Valley Bank. Around $3.3 billion of cash backing its token was stuck for days in the now-defunct Silicon Valley Bank, causing USDC to temporarily lose its dollar value and knocking its reputation as one of the more reliable crypto assets. Circle has since moved 100% of its cash to Bank of New York Mellon.
The closure of these two banks has left many crypto businesses without banking partners and few alternatives. Some businesses have turned to offshore banks that are more willing to work with them. Others have had to find new ways of getting money on and off their platforms.
Some in the sector think that there is a coordinated effort underway inside the US’s top banking echelon and its regulators to eradicate digital assets from finance. However, it may be more about risk management as the digital-asset industry has had its share of wild swings, scams and blowups. Thus some resort to decentralized cryptocurrency exchanges however there are other concerns about safety and security.
