INSUBCONTINENT EXCLUSIVE:
Binance, the one-year-old startup that appeared from nowhere to become the world top crypto exchange, is making major moves as it enters
the next phase of its business
That includes a plan to offer fiat-to-crypto trading in international markets and the release of a decentralized exchange to complement its
current trading site.
The company routinely trades more than $1 billion in crypto volumes daily — even in this current bear market — but
to date it has only allowed crypto-to-crypto trading
That primarily down to the need for regulation in order to offer fiat currency conversation, but that set to change.
Speaking at a Coindesk
event in Singapore last week,CEO Changpeng &CZ& Zhao revealed plans to launch a slew of local exchanges offering fiat conversation in
markets across the world and he provided further details in an interview with TechCrunch.
Right now, we are centralized crypto-to-crypto,&
&We don''t offer fiat gateways and so we rely on others to do that
But throughdiscussions with different regulators across the world, we now have those channels
We want to make it easier for fiat currency to get into the crypto world.
There certainly a need for institutional money
Crypto prices are down as much as 55 percent on January& highs, according to analysis from Bloomberg, so it figures that major players like
Binance need the backing of big names and large amounts to reverse the trend
While many in the space say they are happy to see a low price since it drives out less sincere operators, dwindling interest in crypto
isn''t ideal for those who get paid by facilitating trades.
Zhao said the plan is to open three fiat exchanges this year with a view to
growing the numberto 10 in 2019, with &ideally two per continent.& Part of the goal is to help larger, institutional investors bring money
into the crypto ecosystem, a move that would help Binance and the rest of the industry, too.
We want to& reach both retail and institutional
&Our target has always been more retail focused, but now institutions are coming into crypto and we are seeing that.
Binance CEO Changpeng
&CZ& Zhao speaks at TechCrunch blockchain event in Zug in July 2018 [Image: Daniel Vaiman/Explore To Create]Already, Binance has opened a
joint venture in Lichtenstein, it has announced plans to offer fiat in Malta,and it is working on a launch Singapore
Currently in a limited beta,Zhao said the Singapore-based exchange should go live within the next month after stress testing on areas like
KYC, trading flow and scalability is done.
While he didn''t specifically call out other markets that Binance is looking at, he did rule out
launching in China, Japan and the U.S, which are three major markets for crypto despite respective legal roadblocks
China banned ICOs and exchanges some time ago, the United States has begun cracking down on crypto and Japan has tight licensing around
exchanges which, for one thing, imposes regulations on what tokens can be listed on exchanges.
Japan is progressive on crypto but their
exchange regulation is too strict,&Zhao said
&It makes itvery hard for exchanges.
Indeed, it stands to reason that Binance — which once had an office in Tokyo before deciding against
operating a local entity — would need to modify its token selection in line with Japanese laws were it to gain a license to operate in
Either way, Zhao doesn''t seem key to reevaluate the country just yet.
It looks like Coinbase is preparing to add a lot more
cryptocurrencies
Elsewhere,Zhao said he &respects& China decision to ban ICOs and exchanges, while he is happy to let others do the heavy
lifting in the United States
We are interestedin theUnited States but that not a top priority and we will probably let the other guys go
in first,& he told TechCrunch.
That hardly surprising since Binance is one of three exchanges mentioned by in a report by New York attorney
general Barbara Underwoodwho believes they may have violated state trading law.Zhao declined to comment
Either way, it seems like a lot would have to change — either on the United States regulation side or Binance side — in order for the
exchange to operate in the United States within the law.
Binance — which has flocked to crypto-friendly nations like Malta and Bermuda
instead — said it would open an office in Singapore should the proposed exchange rollout go successfully.
Beyond fiat, the company is also
getting closer to launching a decentralized exchange (dex) which would allow buyers and sellers to trade tokens directly without the
exchange acting as an intermediatory.
High-profile figures have criticized central exchanges
Ethereum creator Vitalik Buterin went so far as to say that they should &burn in hell& for their position controlling asset selection, price
and more.Binance seems to be making as much progress as anyone with its dex which, simply because of the company market position, could
force others to follow suit.
The Binance dex would significantly alter the trading flow as it stands today, but Binance itself — whichZhao
told Coindesk made a profit of $350 million over the past six months — would still draw revenue
That because the dex would operate on Binance own blockchain with the company operating a number of nodes itself
Zhao said that when its nodes are used in transactions, it would gain some of the network fee.
While, equally, the firm stands to profit
from increased dex use because that could make Binance BNB token more valuable, Zhao argued.
The company recently released a very early demo
of the dex — spoiler alert: it is underwhelming — but Zhao said a fully-working service should be available by the end of this year or
early 2019 at the latest.The Binance CEO, who once build software for futures trading for Bloomberg, is leading thedevelopment of the
project.
Development is going well,& he added
&Our dex is very simple but it fast.
Beyond its exchange business, Binance is also putting itself to work on growing the crypto industry
Earlier this year it announced an investment fund that it said is worth $1 billion and would invest directly into companies and new crypto
investment funds, too.It also has aggressive plans to run early-stage accelerator programs across the world to help develop new businesses
that support the crypto ecosystem.
Ella Zhang, who runs the Binance Labs division that manages both projects, candidly told TechCrunch last
month that real use cases for blockchain and crypto are crucial if Binance is to ''thrive& as a business.
Note: The author owns a small
Enough to gain an understanding, not enough to change a life.
