The Binance exchange has announced that it will close its Visa cards in the European Economic Area (EEA) on December 20. The move appears to be due to increasing competition and the rapid development of alternatives in the market.
Is Binance taking a step backwards?
The Binance Visa card, launched in Europe in September 2020, allowed users to convert and spend cryptocurrencies at more than 60 million stationary stores, as well as online. The feature, linked to a wallet in a Binance account, was an innovative solution to store digital assets such as Bitcoin (BTC), Binance Coin (BNB) or BUSD.
Swipe, the company responsible for operating this tool, was surprised by the exchange’s decision to withdraw from the payment card market. Invariably, however, a Binance spokesman assures that only 1% of users will be affected by the change, and that Binance accounts will remain active and running smoothly.
Competing exchanges improve payment card solution
However, it is important to note that competing cryptocurrency exchanges will likely continue to offer similar services, and some have invested in no-deposit options to minimize the risks associated with third-party services.
This is not the first time Binance has made radical changes in the payment card area. Back in July, the exchange stopped accepting new applications for Visa cards in the EEA. Meanwhile, in Argentina, Brazil, Colombia and Bahrain, a pilot program was completed last month, where the partnership was with Visa’s competitor Mastercard.
Binance is betting on its own solution
Although the Visa card is going away, Binance is encouraging users to use Binance Pay, a contactless and secure cryptocurrency payment technology that allows purchases and transfers of digital funds at selected merchants.
For those who would like to avoid centralized exchanges, crypto card options not tied to a single platform can be an attractive alternative. Following the collapse of FTX last year, more and more people are looking for solutions that give them more control over their assets.
However, it is worth remembering that the cryptocurrency market is not without controversy and regulatory issues. The Securities and Exchange Commission in the United States is still in dispute with Binance and Coinbase, accusing them of mismanaging customer funds. Both entities strongly deny these accusations.
For example, despite the problems, Coinbase offers its payment card services in the European Union and the US, allowing holders to spend cryptocurrencies in US dollars wherever Visa cards are accepted. Crypto.com is also launching a new offering, offering bonuses to new users who choose to use their card services.