Binance Bids Adieu To Fiat-To-Crypto Payment Service

Less than twelve months after its launch, the cryptocurrency exchange Binance announced the upcoming closure of its in-house cryptocurrency payment solution, Binance Connect. Previously known as “Bifinity,” this fiat-to-crypto payment service allowed individuals, enterprises, and merchants to carry out transactions involving over 50 cryptocurrencies.

Additionally, it enabled the acquisition of cryptocurrencies through conventional means such as Mastercard and Visa. The choice to terminate the service on August 16 was explained by a spokesperson as a response to “evolving market and user requirements.”

In an official announcement, the team clarified that this action is a component of their routine evaluation of products and services. The objective is to maintain a concentration of resources on fundamental initiatives that are aligned with their long-term strategy.

This strategic shift follows Binance’s recent decline in market share, which has transpired over the past five months since it faced legal action from US regulatory authorities. Industry research data from CCData recently revealed that the platform’s market share dwindled from 56 percent to slightly over 40 percent.

CCData’s analysis also unveiled a trend among “top-tier” exchanges like Coinbase, where their collective market share has dipped from 80 percent to approximately 68 percent since the beginning of the year. This shift is driven by a changing landscape in the crypto domain, where the emphasis on anonymity and unrestricted fund exchange has grown.

Binance’s Market Share Took A Big Hit

Tom Robinson, the chief scientist and co-founder of blockchain tracing firm Elliptic, shed light on the shifting dynamic that, for a significant segment of crypto traders, these attributes outweigh trading on platforms known for strict compliance.

“The Binance effect is huge. Their market share took a big hit after the US’s crackdown on crypto,” said Ilan Solot, co-head of digital assets at London broker Marex.

Crucially, Binance’s altered trajectory in response to these market shifts is influenced by two lawsuits brought against the exchange by US regulatory bodies in 2023. The first, in March, saw the Commodity Futures Trading Commission [CFTC] allege that the platform had illicitly accessed US customers. The Securities and Exchange Commission [SEC] followed in June, accusing 13 Binance-related entities of violations, including the alleged commingling of substantial customer funds.

Lipika Deka: Lipika is a crypto-journalist at TWJ. A graduate in economics and finance, she has a keen interest in the political and socio-economic facets of blockchain technology and the cryptocurrency industry.