Digital assets: Binance´s swift partner sets up restrictions
Binance indicated that one of its SWIFT banking partners will start to restrict processing of fiat to/from crypto to quantums of above USD 100,000 from 1 February 2023. While the impact is yet to be seen, the proportion of users that use SWIFT for crypto-related transmissions appear quite small at this point.
Binance has informed that one of its SWIFT partners, Signature Bank1 , will restrict transactions. As of 1 February 2023, Signature Bank1 , which uses the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network, will no longer process fiat money with a value of less than USD 100,000 from bank accounts to crypto exchanges.
SWIFT is the world’s largest and most important financial network, carrying out trillions of dollars of international money settlement daily. This action is restrictive towards crypto trading activity and may prevent some retail customers with smaller trading amounts from accessing crypto. The news first broke with Binance informing its users of the development this week.
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Fortunately for the world’s largest crypto centralised exchange, the number of monthly users of Binance that Signature Bank1 serves is under 0.01%. Binance said that its other banking partners have not been impacted and that it is “actively working to find an alternative solution” for the affected users.
Additionally, this change has no impact on any other Binance features, so all users can continue to utilise their accounts. In particular, using credit or debit cards to buy and sell cryptocurrency, using one of the other fiat currencies offered by Binance, and using its peer-to-peer (P2P) marketplace will all continue to work as usual.
We are unsure of the initiator of this move to up the processing amounts to USD 100,000, but we see it as part of the road to institutionalise digital assets. If most of the other crypto exchanges have a similarly small proportion of users using SWIFT to process fiat to/from crypto, the impact will probably be negligible.
However, we do not discount the chances that the regulatory hurdles keep getting higher in the future. Crypto asset prices have moved significantly higher in the last two weeks and could be due for some consolidation.