BiG Bank halts fiat transfers to crypto platforms, reshaping liquidity and driving a shift towards decentralized wallets and blockchain trading.
Written by: Dextr|5 min read
BiG Bank recently said they're stopping fiat transfers to crypto platforms, eh? This is a huge move, and not just for them. With the European Central Bank and others giving them a pat on the back (or maybe a stern talking-to) for doing this, we might be looking at some big changes in the crypto market trading scene.
Banco de Investimentos Globais (BiG) is Portugal's top bank, and they've made it clear they're blocking all crypto transfers. Apparently, it's to line up with guidelines from the ECB and Bank of Portugal. This is the only bank in Portugal that's put its foot down like this, and it could change the game for crypto exchanges around here.
In 2023, BiG was managing nearly €7 billion (around $7.2 billion) in assets. Now, they've decided to deprive the crypto market of some liquidity. Other banks are allowing their clients to send fiat to crypto platforms. But BiG ain't having it.
When big banks engage or disengage with the crypto scene, it does mess with liquidity. If they’re pulling out, that means less trading. More importantly, it might mean less large-scale trading.
When banks like JPMorgan or Goldman are in, they bring in a lot of trading activity and capital. This makes trading volumes go up, which in turn helps liquidity. When they leave, though, we tend to see lower volume and less liquidity. BiG’s restriction will probably have a similar effect.
Banks that put their money into custodial stuff or trading platforms make it easier for all of us to get into crypto. We need them to make the plumbing work. But when BiG is restricting access, it’s stalling that plumbing from being built.
The banks are working with regulators, so it gives the market a bit more credibility. This helps attract more players, which means more liquidity. But on the flip side, tougher regulations can scare people off. BiG's restrictions can do the same.
When institutions invest for the long haul, it can serve to stabilize the market. But then BiG's restrictions can add to the uncertainty and volatility.
BiG's reasoning is that they need to comply with stricter EU regulations, especially MiCA. This means we might see other banks doing the same.
For us crypto users in Portugal? Probably a real pain in the neck. It'll be harder to access global crypto markets, and that’s just not gonna sit well with most of us.
People might turn to DeFi and blockchain-based solutions that lets us cut out traditional banks and get what we need from decentralized crypto wallets with no KYC.
Banks are split on this. BiG is the only one refusing, and they’re gonna fall behind the ones that are still permitting transfers.
MiCA and other EU regulations are coming, and will continue to be a factor in how crypto operates in Europe.
BiG's decision is significant and can change a lot of things. Decentralized crypto wallets could offer some benefits, but there are definitely a few risks involved.
Decentralized wallets give you full control over your keys, which means better security. They also let you access DeFi and Web3 stuff while allowing you to make peer-to-peer transactions. Plus, you won't have to deal with the liquidity pool risk of centralized players.
They can be a bit harder to use, and you're completely on your own in case you mess up. Plus, it's not like they’ve solved every risk out there.
BiG’s choice to halt fiat transfers could shift users to alternative blockchain trading platforms.
When banks restrict access, we’ll probably look for platforms that don’t rely on traditional systems. Decentralized exchanges and blockchain-based platforms could see more usage.
Platforms like Uniswap and PancakeSwap might hit their stride. They let you trade crypto without traditional banking services.
Banks might spin to advanced trading platforms, allowing the users to get what they need without traditional banking restrictions.
We might get a growth spurt in the crypto ecosystem, with more stablecoins and DeFi applications emerging in the wake of BiG’s move.
The halt on fiat transfers by BiG is a hint of what's to come in Europe's crypto landscape as regulations tighten. This could change how we make crypto transactions, and maybe push us to other platforms. As traditional banks tighten their grip, it looks like decentralized solutions are getting their time in the sun.
Last Updated: January 08, 2025
January 08, 2025Dextr
January 08, 2025Dextr
