Despite the fall of three crypto-friendly banks, Silvergate Bank, Signature Bank and Silicon Valley Bank, reports have shown a number of top global banks are still interested in working with crypto firms. Some of these top global banks include JPMorgan and Bank of America.
According to the report which was published by CoinDesk following the collapse of Silicon Valley Bank, Sivergate Bank and Signature Bank, many crypto firms have started looking for new banking partners.
Using the Digital Currency Group (DCG) platform, crypto exchanges have already made contact with BlackRock, JPMorgan and Bank of America.
While talks are still ongoing, there are reports that the new banks may however restrict some services for crypto firms, for instance, brokerage and money market services and the ability to wire money to third parties.
Some of these crypto firms are also looking beyond the shores of the United States for banking partners with Switzerland and Asia on the radar. These partners include Revolut in the U.K., United Overseas Bank (UOB) in Singapore, and Bank Leumi in Israel.
On the alternative, some crypto exchanges are also considering launching their own banking facilities, a development experts believe will receive stern responses from regulators.
Investors King understands that the closures of Silvergate, SVB, and Signature bank create a huge gap in the market for crypto-friendly banking, leaving the industry in the cold.
Before the fallout, Silvergate and Signature banks have been providing banking services for most of the cryptocurrency exchanges while Silicon Valley Bank had a lot of crypto startups and VCs as customers.
Investors King earlier reported how Silvergate Bank, a central lender to the crypto industry winded down its operation due to issues relating to liquidity.
Meanwhile, the representatives of the Digital Currency Group (DCG) are billed to meet with Senate Banking Committee on Wednesday (today) to discuss issues relating to the fallout from SVB, Signature, and Silvergate bank. The discussions between both parties could form a new capital market legislation in the United States.
Binance Disables Naira Feature to Halt Possible Capital Outflow
Binance, the world’s leading cryptocurrency exchange platform, on Wednesday disabled the Naira pair on its Peer-to-Peer (P2P) platform shortly after Financial Times (FT) reported the arrest of two of the company’s executives.
The two executives reportedly flew into the country following the Federal Government’s decision to ban cryptocurrency exchanges to rein in speculation and curb currency manipulations.
However, the two were arrested by the authorities at the airport and their passports were confiscated pending investigation into Binance activities in Nigeria.
Binance which had sustained operations on its mobile application despite the ban imposed by the government on the organisation a week earlier and even released a statement to that effect suddenly disabled its Naira pair on Wednesday after FT broke the news of the arrest.
It should be recalled that Binance introduced the P2P service to beat the impact of sanctions on its operations after the Central Bank of Nigeria (CBN) restricted all financial institutions from facilitating cryptocurrency transactions in 2021.
This means that Binance disabled its Naira pair to curb capital outflow in the aftermath of the report and it is not in compliance with the Federal Government’s position as people are insinuating.
During the Monetary Policy Committee (MPC) press conference, Olayemi Cardoso, the Governor, CBN had heaped most of the woes of Nigeria’s currency on operations of Binance and other similar platforms.
According to him, a total of $26 billion was moved through Binance Nigeria in the last one year from both unknown sources and users.
He “We are concerned that certain practices go on that indicate illicit flows going through a number of these entities [crypto platforms] and suspicious flows at best. In the case of Binance, in the last one year alone, $26bn has passed through Binance Nigeria from sources and users who we cannot adequately identify”.
Therefore, the news of the arrest would have triggered an exodus outflow of capital to other cryptocurrency exchange platforms like Kucoin and dragged on Binance’s activity level at a time when activity was just picking up ahead of Bitcoin Halving and the subsequent bullish run.
Nigeria is by far the largest cryptocurrency market in Sub-Saharan Africa and between July 2022 and June 2023 received $60 billion in crypto value, according to Chainalysis.
“Nigeria is one of only six countries in the top 50 by size globally whose crypto transaction volume grew year-over-year in the time period we studied. Its growth rate of 9.0% places it third among those six.”
Nigeria Detains Binance Executives in Crackdown on Cryptocurrency Speculation
Nigeria has detained two senior executives of Binance, one of the world’s largest cryptocurrency exchanges, over currency exchange manipulation on the company’s platform.
The crackdown comes amidst escalating concerns over the rampant devaluation of the naira, which has propelled inflation to a nearly three-decade high of 29.9%.
The detained executives flew to Nigeria in response to the government’s recent ban on several cryptocurrency trading platforms, only to find themselves detained by the office of the national security adviser, who also confiscated their passports.
While Binance has remained tight-lipped about the incident, Nigerian authorities have intensified their scrutiny of cryptocurrency exchanges as they seek to stem illicit financial flows and establish control over the nation’s monetary policy.
Nigeria’s central bank governor, Olayemi Cardoso has raised concerns over the flow of funds through crypto exchanges, citing $26 billion passing through Binance Nigeria in the past year alone from unidentifiable sources and users.
The government’s aggressive stance has prompted demands for detailed user lists from Binance since its inception, indicating a broader investigation into cryptocurrency activities within the country.
This crackdown marks a significant setback for Binance, which has been attempting to overhaul its internal operations following a $4.3 billion penalty imposed by US authorities for money laundering and sanctions violations.
The detention of its executives underscores the challenges cryptocurrency exchanges face in navigating regulatory landscapes worldwide, particularly in emerging markets like Nigeria where authorities are grappling with economic instability and currency devaluation.
As Nigeria intensifies its efforts to attract foreign investment and revitalize its struggling economy, the clash between regulatory oversight and the decentralized nature of cryptocurrencies underscores the complexities and tensions inherent in the global financial system.
Cryptocurrency Market Surpasses $2 Trillion Milestone
The cryptocurrency market has breached the historic $2 trillion milestone following Bitcoin’s rally through the $60,000 price level on Wednesday amid the influx of investments into exchange-traded funds (ETFs).
This milestone underscores the cryptocurrency’s growing mainstream acceptance and investment appeal.
Bitcoin had surged by 5.1% on Tuesday to $57,443 to extend its year-to-date rally to 32% before jumping by another 13% on Wednesday to over $63,000.
This surge in Bitcoin’s value has catalyzed speculative interest in smaller tokens like Ether and Dogecoin as other cryptocurrencies rally.
A noteworthy catalyst behind this surge is the influx of approximately $6.1 billion into Bitcoin ETFs that commenced trading in the United States on January 11.
This surge in demand for Bitcoin, coupled with anticipation surrounding the upcoming reduction in its supply growth through the halving event, has fueled optimistic sentiment among investors and analysts alike.
Despite concerns about potential supply squeezes and volatility, industry experts remain optimistic about Bitcoin’s outlook, pointing to its breakout and positive momentum in the intermediate term.
This monumental achievement reflects the maturation and resilience of the cryptocurrency market, solidifying its position as a formidable asset class in the global financial landscape.
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