ECB President Lagarde Personally Urged Greek PM to Reject Binance’s EU License Bid
European Central Bank President Christine Lagarde personally intervened to block Binance’s attempt to secure an EU-wide cryptocurrency license, according to a report by The Wall Street Journal. Lagarde reportedly urged Greek Prime Minister Kyriakos Mitsotakis to reject Binance’s application.
Binance voluntarily withdrew its application in mid-June and subsequently began halting its crypto trading services in France, Poland, Italy, and Spain starting in July.
Lagarde’s direct involvement reportedly came during a meeting in May, where she conveyed to Mitsotakis that Binance was “not welcome” in Europe. This stance reportedly superseded the Greek Finance Minister’s initial preference, effectively halting Binance’s planned European expansion at the last minute.
Binance had submitted its application for a Crypto-Asset Service Provider (CASP) license under the Markets in Crypto-Assets (MiCA) framework in January 2023 through a holding company established in Greece. The application was filed with the Hellenic Capital Market Commission (HCMC).
Under MiCA’s passporting mechanism, a license approved by a single member state allows operations across the entire EU. In early June, the HCMC had informed the European Securities and Markets Authority (ESMA) of its intention to approve the application. At the time, Binance was preparing for its formal entry into the European market, with CEO Richard Teng even planning a visit to Athens.
However, the situation reversed before the HCMC could make its final decision. According to sources cited by The Wall Street Journal, an HCMC official informed Binance that Lagarde opposed the application. Binance subsequently withdrew its application in mid-June. After missing the July 1 deadline for MiCA transitional licenses, the company ceased marketing to EU users.
The ripple effect was swift. Starting July 1, Binance suspended its spot, leveraged, and futures trading services in France, impacting approximately 2 million French users. The service suspensions later extended to Poland, Italy, and Spain. Binance had previously stated that the HCMC had completed its review and determined the application met MiCA requirements.
The report outlines two primary reasons for Lagarde’s opposition.
Firstly, Binance’s past regulatory issues in the United States served as a significant compliance red flag. Binance and its founder, Changpeng Zhao, pleaded guilty in 2023 to violating U.S. anti-money laundering and sanctions laws, agreeing to a $4.3 billion settlement. This history led Lagarde to view Binance as a high-risk entity.
Secondly, and more profoundly, Lagarde reportedly feared that securing an EU license would accelerate the adoption of dollar-denominated stablecoins in Europe, thereby undermining the European Central Bank’s ongoing digital euro initiative.
Data from CryptoQuant indicates that as of February 2024, Binance held approximately $47.5 billion in stablecoins, representing 65% of centralized exchange stablecoin reserves, a substantial increase from $35.9 billion a year prior.
With services now halted in France, Poland, Italy, and Spain, and the previously promising route through Greece blocked, Binance is compelled to seek alternative entry points in other member states or patiently await a potential cooling of ECB concerns regarding the digital euro.
This case also highlights a deeper contradiction within European regulation. The original intent of MiCA was to enable national regulators to issue licenses based on unified standards, preventing political interference in market access. However, this instance demonstrates a precedent where a central bank president bypassed formal channels to exert private pressure and influence outcomes.
As the market share of dollar stablecoins continues to expand, the ECB has evidently prioritized “preserving euro monetary sovereignty” over “open market competition.” The contest between the digital euro and dollar stablecoins appears to be just beginning.
