SWIFT Crypto Restrictions Leave Users in Dark
Beginning on February 1, 2023, SWIFT will no longer handle the transfer of fiat money from bank accounts to cryptocurrency exchanges if the value of the transaction is less than $100,000. This action will prevent crypto access for hundreds of thousands, if not millions, of clients.
Binance, the world's biggest cryptocurrency exchange in terms of the volume of cryptocurrency trading, was one of the first crypto exchanges to tell its users of the development that occurred this week.
Binance announces impact of SWIFT crypto restrictions
Binance has stated that this decision will impact only Signature Bank customers. The statement on the SWIFT crypto development was issued to Asia Markets. It said that one of the fiat banking partners, Signature Bank, had informed Binance that as of February 1, 2023, they would no longer support any cryptocurrency exchange customers who bought or sold an amount less than $100,000.
Binance said that as a direct consequence of this change, certain customers would no longer be allowed to utilize SWIFT bank transfers to buy or sell cryptocurrency with or for USD for sums less than $100,000.
The previous week, Signature Bank disclosed that it would be taking steps to lessen its exposure to several cryptocurrencies. Concerns about restricting access to cryptocurrencies are becoming more widespread.
Although it is the largest and most important financial network in the world, SWIFT, or Society for Worldwide Interbank Financial Telecommunication, is somewhat of a secretive Belgian-based cooperative.
SWIFT is responsible for the daily settlement of trillions of dollars’ worth of international money transactions. Following the commencement of hostilities in Ukraine in 2014, the US and its allies disconnected Russia from the SWIFT network.
This development brought SWIFT back into the news cycle. Due to the gravity of the situation, the French finance minister likened the decision to shut off Russia's access to SWIFT to the use of a nuclear financial option.
It is, however, still a mystery why institutions involved in stopping SWIFT transfers have moved to release what would become a crypto-nuclear option for millions of people who do not have a minimum of $100,000.
The European Central Bank (ECB) is planning to begin testing a digital currency this year, with the possibility of a complete deployment by 2026. One idea suggests this could be a precursor to central bank digital currencies.
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