Binance is currently struggling with limitations that stop it from operating in nations like the UK and Italy. Binance has closed several of its financial products like stock tokens.
Binance is now against the wall. European regulators have been applying a series of new measures through regulations, which have caused the exchange platform to limit its operations in countries such as the United Kingdom.
To prevent these situations and to be able to resume operations, Binance has begun collaborating with European regulators. It now incorporates tools that violate the precious privacy of users. Such is the case of CypherTrace, which shares data on the movement of users’ money between the different exchanges in Europe.
This type of tool intends to prevent illicit behaviors such as money laundering or terrorist financing. It seems more like a blocking procedure for bitcoin (BTC), in which Binance is seen meddling. All these measures pave the way for the future of central bank cryptocurrencies or CBDC for its acronym in English.
The Growing Fear of Regulators
Regulators argue that the reasons for limiting the activities in the exchange are related to the fact that it does not have the requirements to work as a digital asset exchange entity. Although it seems rather menacing due to the size of this exchange, especially when compared to its more direct competitors.
Binance has been increasing the number of products and services, in the range of cryptocurrencies, a measure that is attracting more and more customers.
The case of LocalBitcoins is very curious. Even though in its moment it brought exchange rates thanks to its great liquidity, it was limited to operating with a single cryptocurrency and offering somewhat cumbersome exchange processes.
In Binance, all these actions can happen from a mobile app, which LocalBitcoins does not have. The platform can have the entire suite of services that this exchange makes available (Spot and futures trading, debit cards, stock tokens, P2P exchange, among others).
Binance became a monster in the market thanks to the number of products it offered. Such was its growth that 1 in 5 BTC held by exchanges around the world, has it or had Binance back in June.
Binance, due to the size of its capital and the mass of clients, has become a problem. Not only because of the illicit behaviors (fraud, cryptocurrency scams, money laundering, among others) that it could bring, but also its progress and what that progress means for central bank digital currency projects.
Binance Might be an Antagonist of CBDCs
Europe is shaping up to launch its cryptocurrencies known as CBDC or central bank digital currencies. Its main goal is to serve as a digital currency, streamlining bureaucratic processes when being transferred. It is a cryptocurrency issued by a Central Bank.
The Digital Euro is already available but not currently working. Some specialists and experts in traditional banking consider it a success. Even the European Central Bank mentions that privacy and security will be in good hands with the Digital Euro.
By: Jenson Nuñez
