Author: Joy, LianGuaiNews
After being accused by US regulators, Binance’s cooperation with traditional financial institutions is facing numerous challenges, which is a microcosm of the struggle between the crypto industry and traditional finance.
On August 24th, a spokesperson for Mastercard stated via email that Mastercard and Binance will end their four crypto card projects in Argentina, Brazil, Colombia, and Bahrain on September 22nd. Visa, since July, has also stopped issuing new co-branded cards with Binance in Europe. Neither Mastercard nor Visa disclosed the specific reasons for this adjustment.
However, Binance posted on the social media platform X (formerly known as Twitter) that less than 1% of users in Latin America and the Middle East will be affected by this decision, and it will not impact Binance accounts globally. At the same time, Mastercard stated that this adjustment will not affect any other crypto card programs. The company stated that a grace period will allow cardholders to convert any assets in their Binance wallets. Card services will cease operations in the Middle East on August 25th and in Latin America on September 21st. Users can still process refunds and disputes until December 20, 2023.
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Binance debit cards allow users to make purchases in stores or online using their cryptocurrency assets, similar to how traditional bank-issued debit cards work. Less than a year ago, the card was launched in Latin America, first in Argentina in August, and then in Brazil in January of this year. It was issued by Movii and allowed users in the region with valid identification to shop and pay bills using cryptocurrencies.
Interestingly, on August 16th, Binance announced in a statement that the company will officially close its crypto payment service Binance Connect (formerly known as Bifinity) one year after its launch. Binance Connect was launched in March 2022, allowing merchants to accept cryptocurrency payments. At the time, the exchange stated that it aimed to help businesses “get ready for cryptocurrencies.” The service supported 50 cryptocurrencies and all major payment methods, including Visa and Mastercard.
At that time, Binance cited the reason for closing Binance Connect as “wanting to refocus on its core products and long-term goals to ensure resources continue to be concentrated on core work that aligns with the long-term strategy.” Perhaps, besides focusing on its own business, the important reason for the discontinuation of this product was the termination by its partners.
Indeed, shortly after the announcement of the closure of Binance Connect, Checkout.com, a London-based payment processing company, terminated its contract with Binance on August 17th due to money laundering and compliance concerns. In the letter to Binance, Checkout’s CEO Guillaume Pousaz expressed more concerns about Binance’s anti-money laundering, sanction, and compliance controls. In response, Binance stated its disagreement with the basis for Checkout’s termination of the contract and stated that it is considering legal action. Checkout was one of the partner institutions of Binance Connect, while another partner institution of the project, European payment provider LianGuaiySafe, terminated its cooperation with Binance in June.
Earlier, Binance was cut off from the US banking system in February and lost the ability to accept bank transfers from some banks in Australia in May. However, the suspension of cooperation in these two regions is not only targeting Binance, but almost all exchanges.
It is worth mentioning that after the ship of friendship with traditional finance overturned, Binance is actively building a new payment system.
On August 22, Binance announced the launch of its encrypted payment service, Binance LianGuaiy, in Brazil. It is reported that Latam Gateway is the payment service provider for Binance in Brazil. Binance LianGuaiy is a service provided in cooperation with payment institutions officially licensed by the Central Bank of Brazil, which are ultimately responsible for the processing of payment activities.
Binance LianGuaiy is a contactless, borderless, and secure cryptocurrency payment method that supports over 70 cryptocurrencies, including Bitcoin (BTC), BNB, Ethereum (ETH), and USDT. Users do not need to pay any fees, while merchants and suppliers can use a solution to accept payments, which can securely transfer funds from wallet to wallet in a matter of seconds. Brazilian merchants can choose to pay directly to their wallets in Brazilian Real or cryptocurrency. Since its first launch in 2021, Binance LianGuaiy has reached over 12 million active users and has processed over $98 billion in payments so far.
In the current situation where cryptocurrency exchanges are collectively being restrained by traditional finance and regulatory institutions, how to break through and achieve the circulation of funds has become a difficult problem for a long time in the future.
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