Binance Stablecoin Licence Bid Faced Rejection From Bank of Greece Before Withdrawal

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Binance withdrew an application to obtain a Greek licence to issue stablecoins after the Bank of Greece determined that the application did not meet all regulatory and supervisory requirements, according to AML Intelligence.

The application, which had not previously been reported, sought authorisation for Binance to operate as an electronic money institution and issue stablecoins.

Binance also submitted a separate application to the Hellenic Capital Market Commission to operate as a crypto asset service provider.

According to AML Intelligence, the Bank of Greece was preparing to reject the stablecoin application because it considered that Binance had not complied with all relevant provisions of the regulatory framework.

Binance disputes that characterisation.

A company spokesperson said the application was not rejected and that Binance had instead decided to withdraw it voluntarily.

The withdrawal reportedly took place around the same time Binance withdrew its separate application to operate as a crypto asset service provider in Greece in mid June.

Bank of Greece denies outside pressure

The development comes amid reports of scrutiny from European regulators over Binance’s efforts to expand its regulated operations in Europe.

The Wall Street Journal reported that European Central Bank President Christine Lagarde had personally intervened to prevent Binance from obtaining a crypto exchange licence.

The Bank of Greece rejected claims that external pressure influenced its decision.

The central bank said there had been no contact between its Governor Yannis Stournaras and Lagarde concerning Binance and denied receiving instructions or pressure from another authority.

“In the case at hand, the Bank of Greece simply applied the rules and did not ask or receive any advice or pressure by any other authority,” the Bank of Greece said.

Binance faces continued regulatory scrutiny

Binance has faced extensive regulatory scrutiny since November 2023, when it pleaded guilty in the United States to violations of anti money laundering requirements.

The company agreed to pay approximately $4.3 billion in penalties, while its then chief executive Changpeng Zhao, known as CZ, was sentenced to five months in prison. Zhao was later pardoned by US President Donald Trump.

Binance has also faced scrutiny over alleged sanctions violations. Bloomberg has reported that US prosecutors were investigating possible breaches involving Iranian sanctions.

Why stablecoins matter

Stablecoins are digital assets designed to maintain a relatively stable value by being linked to assets such as national currencies.

Their growing use has attracted increased attention from European regulators.

The European Central Bank has warned that the dominance of US dollar denominated stablecoins could create risks for Europe’s monetary sovereignty.

The Financial Action Task Force has also highlighted the growing role of stablecoins in illicit cryptocurrency activity.

Binance’s withdrawal of its Greek applications adds another development to the company’s efforts to secure regulatory approval across Europe as authorities continue to tighten oversight of the cryptocurrency sector.

The Bank of Greece’s position, according to its statement, was that the application was assessed under the applicable regulatory framework without intervention from other authorities.

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