Binance opens the fiat floodgates, accepting credit card payments for crypto
January 31, 2019, 7:00AM EST · 2 min read
- Binance will allow traders to use Visa and MasterCard to buy a wide range of crypto, effectively offering a fiat to crypto gateway
- The move could be tentative for credit cards however, as card issuers could deny the use of credit for crypto purchases
Binance, the largest spot cryptocurrency exchange by trading volume, is now accepting credit and debit cards for crypto payments, the firm announced Thursday.
Malta-based Binance is a crypto to crypto exchange, meaning traders do not deposit fiat onto its platform, but the surprise move to accept credit and debit cards effectively provides a fiat onramp for users around the world.
"We want to provide Binance traders with fast and easy access to crypto, in the most secure way possible,” Changpeng “CZ” Zhao, chief executive of Binance said in a news release. “With most of the world’s money still resting in fiat, building fiat gateways is what we need now to grow the ecosystem and create more long-term opportunities for crypto.”
Binance, which has a stronghold on trading in Asia and sees $2.3 billion worth of crypto trade hands on its venue in a given week, has yet to dominate the domestic clientele of U.S.-based crypto venues. But that could change if users are able to purchase bitcoin using a credit card, insiders say, putting it in direct competition with Coinbase, which is one of the few exchanges to accept credit and debit cards for those outside the U.S., as well as bank account transfers. "Some countries and states in the U.S. will be limited but those are limitations from the Simplex side, not Binance's," a Binance spokesperson told The Block.
To be sure, accepting credit cards specifically for cryptocurrency purchases has been met with some backlash in the past. Credit card issuers have long been uncomfortable about allowing their clients to purchase crypto using credit. Lloyds Bank in the UK, for instance, banned their clients from making crypto purchases last year, following in the footsteps of JP Morgan and Citigroup. Australia’s largest retail-aimed bank, The Commonwealth, also said it would not allow its customers to buy digital assets using Commbank credit cards "due to the unregulated and highly volatile nature of virtual currencies." As a result, some sources question how long Binance will be able to accept credit card payments.
Binance will initially allow users to buy bitcoin, ethereum, litecoin and XRP with a credit or debit card. The firm is partnering with Simplex to support the new service. “Easy and fast credit card payments, for mainstream users, is a key factor in wider adoption of crypto in general. We’re thrilled to partner up with Binance and together enable a much better, fast and easy experience,” said Nimrod Lehavi, Co-Founder and CEO of Simplex.
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