Leading cryptocurrency exchange by trading volume Binance is slowly building inroads to reclaim some market share in the Chinese cryptocurrency market after two years following its exit from its birthplace.
This week, during a media session at the Shanghai Blockchain Week, Binance’s co-founder and chief marketing officer (CMO) Ye Hi, announced that the platform is planning on launching a fiat-to-crypto OTC platform specifically to cater for Chinese traders. Only the Chinese local currency will be supported on the proposed platform which will be launching next month according to Hi. Specifically, the new platform will act as a fiat onramp allowing Chinese traders to deposit their fiat currencies to the platform in order to buy bitcoin.
An OTC (Over the Counter) trading platform allows users to trade directly with one another usually without the intervention of a third party only serving as a platform to unite traders. Launching such as service in China will be challenging especially since China has not yet reversed its cryptocurrency trading ban that it effected back in 2017 which was responsible for Binance and other major exchanges exiting the market. It remains to be seen how Binance will handle fiat deposits since banks are banned from transacting with cryptocurrency exchanges.
OTC trades are particularly thriving in the Chinese market since the government ban was rolled out in 2017. It is the only option that most Chinese miners have to liquidate their holdings albeit buyers acquire the asset at a premium over other markets. Binance will probably bring a relatively more mainstream brand to the market now.
This is not the first rodeo for Binance in the OTC market as it already has a functioning OTC desk which it launched earlier this year. Back in April, the exchange reported massive profits from the service bringing about $80 million in profits. Pretty impressive for a few months-old product.
Earlier this month, Binance invested for the first time since exiting the Chinese market. According to a report the exchange made a strategic investment in Chinese media and data source Mars Finance for an undisclosed amount. However, the media firm is now worth about $200 million following the investment. As Ye Hi revealed during the Shanghai Blockchain Week, Binance has etched a plan to be executed over the coming months with the aim of dedicating more time and resources to serving the Chinese market.