Christine Lagarde in Binance’s way: Why its EU license bid fell apart

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Christine Lagarde in Binance’s way

Lagarde's reported intervention

Lagarde reportedly opposed granting Binance a MiCA license in Greece and raised her concerns with Greek Prime Minister Kyriakos Mitsotakis. Yet the ECB has no formal role in licensing crypto exchanges.

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The reports add weight to claims that first surfaced when Binance's bid ran into trouble in June. At the time, there were indications that the exchange had been close to approval before opposition emerged elsewhere in Europe's regulatory system. Greek authorities dispute parts of that account. The Hellenic Capital Market Commission says it assessed Binance independently under EU and Greek rules, while the Greek government says it played no role in the regulator's assessment.

With MiCA in sight

But why did Binance choose Greece to seek authorization under MiCA? A license issued by one national regulator allows a company to provide services across the EU, making the success of its Greek application crucial to the exchange's plans for the European market.

By June, Binance believed the process was well advanced. The company said it understood that the HCMC had completed its review and considered the application compliant with MiCA requirements. Reuters then reported on June 16 that the bid was set to be rejected, citing people familiar with the process.

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Binance maintained that it had received no formal indication of a rejection and had worked with regulators for more than a year. Eight days later, the exchange withdrew its application before a final decision was issued and said it would seek authorization in another EU country.

Binance's past followed it to Greece

The licensing bid came against the backdrop of Binance's previous regulatory failures. In 2023, the exchange pleaded guilty in the U.S. to violations involving anti-money-laundering requirements, unlicensed money transmission and sanctions, agreeing to pay more than $4.3 billion. Founder Changpeng Zhao separately pleaded guilty to failing to maintain an effective anti-money-laundering program and later served four months in prison.

Binance says its compliance operation has changed substantially since then. More than 1,500 people now work in compliance roles, according to the company, following significant investment in controls and governance. European regulators continued to scrutinize its record as the Greek licensing process progressed.

Why stablecoins matter to Lagarde

Lagarde, meanwhile, had been publicly raising another concern about digital finance in Europe. In May, shortly before Binance's Greek bid unraveled, she noted that the stablecoin market had grown from less than $10 billion six years earlier to more than $300 billion. It remains overwhelmingly denominated in U.S. dollars, with Tether and Circle accounting for most of the market.

For the ECB, wider use of dollar-backed tokens could deepen Europe's reliance on the U.S. currency as more financial activity moves into digital markets.

"The growing argument is that to remain relevant, Europe must respond by promoting euro-denominated stablecoins of its own. Otherwise, it faces a future of digital dollarisation and a loss of monetary sovereignty," Lagarde said.

Lagarde did not argue that Europe should simply create competing stablecoins. She instead emphasized European digital infrastructure anchored in central bank money, including the digital euro. Binance's scale and the importance of stablecoins to crypto trading put the exchange directly within that broader debate.

Zhao pointed to "other forces"

After Binance withdrew its application, Zhao suggested that the formal licensing process did not tell the whole story. "There were two countries in the EU that wanted the Binance application," Zhao said in a June interview. "But unfortunately, there were other forces that were against it."

Asked specifically about reports that Lagarde had intervened, Zhao said he had seen the claims online but had no documents confirming them. He stopped short of identifying the "other forces" he believed had opposed Binance.

Who ultimately decides under MiCA?

MiCA leaves national regulators responsible for licensing, even though approval in one country can give a crypto company access across the EU. That makes Binance's Greek bid an unusual test of where national authority ends and wider European influence begins.

Binance says it plans to pursue authorization elsewhere in the EU. Lagarde's reported involvement, however, leaves a question that will follow its next attempt: how independent can a national licensing decision remain when one approval can open the door to the entire European market?

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