Crypto investors and businesses alike have been left questioning the implications of the announced closure of Binance Connect by Binance on Tuesday (Aug. 15).
The regulated crypto arm of the Binance exchange will close Wednesday (Aug. 16), according to CoinTelegraph. A company spokesperson told the site, “At Binance, we periodically review our products and services to ensure that our resources continue to be focused on core efforts that align with our long-term strategy.”
Originally known as Bifinity, Binance Connect had launched in March 2022. It is now the latest crypto business to fall by the wayside in a tumultuous sector.
The climate of uncertainty in the digital asset space was exacerbated by the ongoing saga of regulation and standard integration. However, the crypto industry is also turning its attention to the growing interest in stablecoins in the midst of this tumultuous time.
Circle Internet Financial, headed by Jeremy Allaire, is one player in what is becoming an increasingly competitive field. Allaire recently remarked to Bloomberg on the shockwaves in the industry.
“The Terra collapse helped us; the Binance forced-conversion hurt us,” Allaire said. “The FTX collapse sort of helped us, and then the failure of regional banks hurt us.”
Allaire has an optimistic outlook going forward, however, as Circle has made strides towards increasing the standards and integrity of its offerings. The company has hired Deloitte as an auditor and plans to use their findings to release comprehensive financial reports.
“Companies and entities that can’t meet those standards — those financial integrity standards, those operational, risk management standards — they will not be able to operate,” Allaire went on to say. “My belief is that over the next two years, those players that cannot meet the standards will be crowded out of the mainstream market.”
This statement comes off the back of recent guidance from the Federal Reserve, in which banks were given parameters to work within in regard to their digital asset activities, including the issuance of stablecoins.
It appears that the EU is following suit, as stablecoin issuers in Europe have recently been told to begin preparing for rule changes that could come into effect in 2024. The US House Financial Services Committee advanced a bill to regulate stablecoins last month in a display of commitment to what is becoming an increasingly prominent feature of the industry.
