Does Binance need a license to launch its card in Venezuela? It's not that simple

• Sunacrip cannot demand what is outside its jurisdiction.
• The use of bolívares remains undefined operationally.

The potential arrival of Binance's debit card in Venezuela has raised a question that resonates throughout the bitcoin (BTC) and cryptocurrency ecosystem: does the exchange need a license from the National Superintendency of Cryptoassets and Related Activities (Sunacrip) to operate in the country? The answer is not a straightforward yes or no. It depends on how you look at it.

To clarify, CriptoNoticias spoke with lawyers specialized in the digital asset ecosystem. Their assessments agree that one thing is for Binance to have a physical presence in Venezuela; another, very different, is that Venezuelans use its services in a cross-border environment.

The one who states this unequivocally is Ernesto Portillo, founding lawyer of CriptoJuris Venezuela, a law firm specialized in digital asset law. Venezuelans access from abroad, as if they were opening an account in a bank from another country. And that, according to the lawyer, is decisive.

If Binance had a physical headquarters in Venezuela, it would indeed need a license to comply with the standards of the Financial Action Task Force (FATF). But Binance does not operate in Venezuela nor does it have a physical headquarters in the country. The exchange complies with the international standard of recommendation 15 from the international body. It has a license where it has a physical presence. Ernesto Portillo.

The FATF requires a license only where the company has a physical presence. Binance does not have one in Venezuela. Instead, it already holds 22 licenses in other jurisdictions: Seychelles, Hong Kong, Argentina, Mexico, Colombia, Brazil, and continues to add more.

For Binance to launch its card in Venezuela, what it needs is not a license from Sunacrip. It needs for the instrument to function within the framework of international agreements with Mastercard.

According to Portillo, cryptoassets are not part of the traditional Venezuelan financial system, whose legislation is primarily designed for banking, insurance, and the securities market.

Cryptoassets do not belong to the Venezuelan financial system. For that, the country has a Superintendency of Banks and a Superintendency of Cryptoassets, in addition to a regulatory framework for cryptocurrencies and another for fiat money. Ernesto Portillo.

Since Binance operates with cryptoassets and not with fiat money, it is not subject to the rules of a traditional bank. And since it has no physical presence, Sunacrip cannot demand a license from it, as Portillo adds.

Here is the detail that few are seeing.

Binance does not need to be under the protection of a traditional financial institution to issue the card. The platform operates through the Crypto Card Program of Mastercard, an instrument that grants it direct authorization to issue cards, compensating transactions directly in dollars. Ernesto Portillo.

What does this mean? The Mastercard program allows consumers to spend digital assets at millions of establishments worldwide. Transactions are converted from cryptocurrencies to fiat currency before reaching the Mastercard network.

The process works like this:

• The user loads their card with cryptoassets like USDT (Tether), bitcoin, ether (ETH), or USD Coin (USDC).

• When paying, Binance converts the funds to dollars through its integration with Mastercard.

• The Mastercard network processes the payment in the local currency of the merchant.

Settlement in bolívares, in the case of Venezuela, is an operational issue that occurs within the framework of international agreements with Mastercard. The exchange rate applied, whether official or fair value, is a separate discussion that defines whether the card will be attractive to local users. The license, from a legal perspective, is not the obstacle.

The real challenge lies in how transactions are settled in bolívares. If Binance manages to make its card attractive and competitive in the local market, the 5 million Venezuelans registered on the platform will have a new way to spend their cryptoassets. Ernesto Portillo.

Therefore, the license is not the problem. It never was.

But if it fails to make the experience simple and profitable, the card will be relegated to international purchases. And that, for the average user, would be a missed opportunity. So in that sense, time and the fine print, as always, will tell.

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