How Will Binance Card's Closure Affect Users?

Many within and outside of the crypto industry tend to view cryptos as speculative assets first and foremost. So much time and effort is put into speculating on which tokens will be most profitable and which are the best to trade.

Amidst all of this, it is important to remember that cryptos are also currencies in their own right. There are also many people around the world who use cryptocurrency to make everyday payments and these people need access to the tools to do so. Sadly, one of these prominent tools in the form of the Binance Mastercard has been shuttered.

What Happened to the Binance Mastercard?

The Binance card, which has been running for several years, is a debit card that allows crypto users to spend their tokens in the material world. Basically, the card, which was created in partnership with Mastercard, allows its holder to spend their crypto funds at any merchant where Mastercard is accepted.

This card and others like it have been instrumental in letting people use crypto for non-trading purposes. But sadly, Binance and Mastercard have announced that they will be ending the card program in Argentina, Brazil, Colombia and Bahrain. This will come into effect from September 22, 2023, and so far, does not seem to affect the Binance card program in other countries.

This also comes at an interesting time as Binance has been dealing with regulatory issues in the US that have seen its CEO facing serious accusations from the SEC. But this move is bound to have an immense effect on users.

How Users Will be Affected

As we've said, people do more with cryptocurrency than just trade for profit. These days, more merchants are accepting cryptocurrency as a means of payment. In fact, this was one of the things that facilitated the need for the Binance card in the first place. People wanted to spend their crypto while out and about and the card gave them a way to do so.

We also have to consider things like gambling. As crypto gambling has become more appealing to customers, more casinos are reaping the benefits. Some of the best Bitcoin casinos in the UK, for example, boast a horde of users who even prefer to play with crypto. But to do this, they will need an easy way to deposit funds from their crypto wallets and this is where the Binance card would have come in.

But now that it has been suspended in some regions, consumers will have to find new alternatives to make these purchases. When it comes to everyday purchases, they might have to find another company that offers a similar service. If they can’t, they will have to go through the process of converting their crypto to fiat and then depositing it into their traditional bank accounts.

The closure of the Binance card doesn’t mean that they can’t spend their cryptocurrency for everyday purchases, but it does mean that it will be more complicated to do so. And again, that was the benefit of a Binance card; if they had crypto in their wallet, they could spend it without first converting.

For many users, this convenience was the reason they embraced crypto for domestic use in the first place. And it is safe to say that without this convenience, they might just abandon using crypto to pay for meals, shopping and gambling. This is unfortunate because it undermines the work that has been done in the industry for years to promote crypto adoption outside of trading.

If cryptos are going to be used for purchases, the process has to be as simple as possible. Spending fiat through debit cards is as simple as having fiat currency in your bank account. If spending with crypto has any chance to compete, it will need to come with the same level of simplicity. In the regions where Binance card has now been suspended, we can only hope that replacement services pop up to fill this gap. And this replacement would need to be in partnership with a payment processor as big as Mastercard to be as effective.

If not, crypto users there will be negatively affected for a long time to come.

Conclusion

Binance has had a bit of a difficult year regulation-wise and its Binance card program seems to be the newest casualty of these issues. Its users in Argentina, Brazil, Colombia and Bahrain no longer have access to the card and this effect could be far-reaching.

Most notably, it could mean that crypto users will be less likely to use their tokens to pay for the goods and services they need. This will further drive domestic crypto adoption backwards and reinforce crypto’s status as only a speculative asset.

Date: 04.09.2023