The CEO of Binance, Changpeng Zhao, is looking at the possibility of buying banks “as a way of bridging the gap between the worlds of traditional finance and crypto,” according to a Bloomberg Report. Zhao said this in an interview with Bloomberg at the Web Summit conference in Lisbon last week.
The Binance CEO was not specific on targets, but he disclosed that he was open to either a minority stake or a complete bank acquisition. Bloomberg quoted Zhao as saying:
“Some people hold certain local licenses, traditional banking, payment-service providers, even banks. We’re looking at those things.”
Last month, Zhao said the largest crypto exchange in the world had more than $1 billion to spend on deals this year. Therefore, his remarks on the possibility of acquiring banks point to one of the areas the crypto company may pay part of the money.
The Binance executive’s comments emphasize how the crypto space and the traditional finance sectors are becoming increasingly interconnected. Zhao said, “We want to be the bridge between crypto and the traditional, financial [TradFi] world.”
Despite the bear market conditions that have characterized 2022 wiping out more than $2 trillion worth of digital asset value, institutions continue to enter the crypto space and seek exposure to digital assets. According to Bloomberg, financial institutions such as Goldman Sachs Group Inc. and BlackRock Inc. are venturing deeper into the crypto sector.
Zhao also noted that investing in banks is a brilliant strategy for the Cayman Islands-based crypto firm since when the crypto trading platform works with such financial institutions, Binance could end up driving new users to the banks, increasing their valuation in the end.
“We have found that when banks work with us, we drive so many users to them, so the bank’s valuation goes up exponentially, like why don’t we just invest in them as well, so that we capture some of the equity upsides.”
According to the crypto leader, investing in banks would be an excellent opportunity for the crypto exchange to increase the expected growth of the bank’s valuation after signing a business agreement with the company behind Binance.
Binance’s Acquisitions And Deals
In early October, Zhao said Binance might spend more than $1 billion on acquisitions and investments this year, despite a prolonged crypto winter.
According to a Bloomberg report, the world’s biggest digital-asset exchange has already used much of the $1 billion on deals and acquisitions this year. The firm has committed approximately $325 million on 67 projects this year, compared to the $140 million spent on 73 projects last year. This does not include a possible $200 million investment in the Forbes media company and the $500 million used to finance Elon Musk’s acquisition of Twitter Inc.
More data from Tracxn shows that Binance has spent over $400 million on acquisitions and investments in multiple sectors.
As such, CEO Zhao’s eyes on the banking sector are just another area that the crypto company is looking to expand into as it seeks to increase its footprint in the TradFi sector.