Cryptocurrencies are quite new. Regulators are still not on the same page all over the world. There are those countries that have allowed businesses to thrive such as Malta while there are also those countries like China that has worked tirelessly to ban cryptos. But how exactly did China’s ban on cryptocurrencies helped Binance?
Zhao Changpeng was able to build one of the world’s biggest crypto exchange today. In fact, it is the biggest crypto exchange in terms of trading volume. Their strategy is to expand anywhere except in China.
Binance was founded in Hong Kong last year. It was helped in a way by China’s continuous efforts to stop crypto-related activities on domestic crypto trading. When China decided to stop crypto exchanges in September last year, Binance decided to move to Tokyo. This means that it is outside the reach of China’s regulators. And also, Binance has also opened itself to different markets including that of Singapore and Taiwan.
As Chinese operators were scrambling to adapt to the new rules by mainland regulators, Binance simply built its own business. It gave them enough time to grow and were able to have a profit of $350 million mostly from transaction fees in just six months from January to June 30. What made it appealing is the fact that it hosts a variety of tokens for its 10 million users worldwide.
Not Serving Chinese Clients
Zhao’s Binance has been more mobile compared to the other crypto exchanges that are within reach of the Chinese regulators. Zhao was able to visit eight countries including some crypto friendly countries such as Switzerland and South Korea. Binance was able to hire new staff, attend crypto-related events, and even forge deals. For a year, he hasn’t travelled back to China.
Building Blockchain But Shutting Down Cryptos?
The Chinese government has announced that it is looking to improve the adoption of blockchain technology. However, it has continued to stop crypto activities. Recently, China has continued to crack down on crypto-related activities by banning malls and hotels from hosting crypto-related events.
So why exactly is the Chinese government against cryptocurrencies? Because of the volatility of cryptocurrencies, there is a possibility of capital flight that could directly impact the Chinese economy.
Binance Launching New Trading Platforms
Binance is expanding. In fact, it is launching 10 new markets for trading platforms wherein users can buy digital currencies using their local currencies. As of now, Binance only supports trades between different cryptocurrencies.
The initial target countries by Binance included Malta, Uganda, Singapore, Jersey, and Liechtenstein. Most of these countries have a progressive view of how to handle cryptocurrencies. However, with these plans that he laid out on the table, it is possible that Binance can even get bigger considering how they can now accommodate transactions from fiat to cryptocurrencies. These plans are expected to go live in the next few months.
Given the regulatory changes in the niche, it is imperative for crypto exchange businesses to pick where they are going to settle. For instance, even Kraken opted to leave Japan after the country decided to impose stricter measures on operating crypto exchanges.