Binance’s SWIFT partner, Signature Bank, has set a minimum transaction limit of $100,000.
On January 21, Binance, one of the biggest cryptocurrency exchanges by volume, issued an alarming announcement in its email subscription. Effective February 1, users with U.S dollar-held bank accounts looking to buy or sell crypto for less than $100,000 via SWIFT payment will no longer be able to do so.
3.6 million Binance users are from the United States, according to Semrush statistics. Few of those users make transactions exceeding $100,000.
The cryptocurrency exchange was quick to assure users that they are “actively seeking” a new SWIFT partner to solve the issue.
“This is the case for all of their crypto exchange clients. Please be advised that until we are able to find an alternative solution, you may not be able to use your bank account to buy or sell crypto with USD via SWIFT with a value of less than $100,000 USD after February 1st, 2023.”
Binance won’t be the only crypto trading platform affected by this decision. But until a new SWIFT partner is found, U.S. users will only be able to use their credit and debit cards, as well as complete payments to and from third-party exchanges. Non-USD bank transfers, such as using the Euro, will not be affected.
The banking partner in question, Signature Bank, is aiming to decrease its exposure to digital asset markets. Amid plummeting shares in 2022, Signature has decided to pull back as much as $10 billion in deposits from digital assets clients.
Despite the seeming withdrawal of traditional banks from the cryptocurrency market, the launch of centralized digital assets projects isn’t slowing down. Last week at the World Economic Forum in Davos, Switzerland, HSBC, Deutsche Bank, and Bank of East Asia, among others, were in attendance for the launch of a Universal Digital Payment Network (UDPN) for stablecoins and CBDCs.
As long as cryptocurrency is stripped of its decentralized qualities, centralized financial entities don’t mind it, even encourage its adoption.