Binance has restored fiat currency payments with Mastercard and Visa cards for the purchase of crypto.
The service had been interrupted last year following the issues encountered with the authorities.
Summary
Payments with cards on Binance: Mastercard for fiat and Visa for crypto
The announcement was made yesterday.
Now on the exchange page where you can purchase cryptocurrencies using fiat currency, various payment methods are available, including Visa and Mastercard cards, Google Pay, Apple Pay, and SEPA transfer.
Payments in fiat currency with Visa and Mastercard cards for the purchase of cryptocurrencies are widely used, because they are generally the preferred method by new, less experienced users.
The more experienced users, on the other hand, generally prefer to deposit fiat currency on exchanges via bank transfer, also because this method allows the transfer of larger amounts. Furthermore, this is also the preferred method for withdrawals.
Instead, for small and quick payments, many prefer credit or debit cards, or online accounts like PayPal.
The suspension
When the crypto exchange of Binance was launched in 2017, it did not have support for fiat currencies. This was added later, using third-party services.
Last year Binance had several compliance issues, especially in the USA, so much so that its famous co-founder and former CEO, Changpeng CZ Zhao, is currently in prison in the United States.
Those problems seem to have been resolved, but to fix the situation the exchange had been forced to disable several functions considered to be at higher risk.
One of these was the payment with Visa and Mastercard cards.
Another feature whose disabling left many users dissatisfied was the exchange card powered by cryptocurrencies to be able to pay anywhere in fiat currency.
The restoration of fiat payments on the exchange does, however, suggest that those measures were indeed only temporary, useful for resolving all outstanding issues with the authorities as quickly as possible, putting themselves in a position to no longer have any kind of problem with the regulators.
Now that such problems seem to have been resolved, evidently the exchange is looking for new reliable partners thanks to whom it is trying to restore as many services as possible.
The problem of payment cards
The main problems related to the use of credit or debit cards in fiat currency on crypto exchanges are those related to anti-money laundering (AML) regulations.
In fact, it is no coincidence that the former CEO of Binance CZ has been accused of facilitating money laundering, although he does not appear to be directly involved in similar activities.
On one side, there are operators like Visa and Mastercard, but also PayPal and similar, which have strict obligations on the control of the origin of the capital, when it comes to significant amounts and suspicious users.
On the other hand, there are crypto exchanges that, especially in the past, have let things slide a bit too much, in some cases ending up not being compliant with the regulations in force on the matter.
At the moment when the authorities discovered behaviors not compliant with AML rules, they ordered the suspect exchanges to close, and in the case of Binance, they also imposed a large fine and imprisoned the CEO, although for a short time (4 months).
Therefore, crypto exchanges operating in highly regulated jurisdictions, such as the USA or the EU, must try to comply with regulations just like other financial operators, such as those managing payment cards, otherwise, it is inevitable that they risk sanctions or even forced closures when they come under the spotlight.
Binance: The integration of crypto and fiat payments with Mastercard and Visa
All this is increasingly moving towards a deep and total integration of centralized crypto exchanges within the traditional financial system, and implies that they must comply with regulations exactly as all the others are forced to do.
The real revolution of cryptocurrencies in fact does not lie in centralized tools, such as Binance and other CEX, but in decentralized ones, such as for example the DEX.
In fact, the authorities can not only easily intervene to regulate the CEX, but they are also required to do so by law. On the other hand, they risk being powerless against the DEX, because the latter do not have a reference team, and a company that owns and manages them, or at least they should not have them if they want to be truly decentralized.
Therefore, if on one hand the CEX and the DEX that are not truly decentralized will inevitably end up being forced to comply with the laws in order to continue operating, the true decentralized exchanges will probably continue to function as they are now without being able to be truly regulated by the authorities.
