Up until now the world’s largest crypto exchange by daily volume has only permitted crypto-to-crypto trading. This will soon be changing for Binance when it opens its first fiat-to-crypto platform in Uganda.
Binance currently handles just over a billion dollars a day in trade volume according to coinmarketcap.com, and around 20% of that total is on the BTC/USDT pair. By offering fiat transactions Binance would be expanding its services further and joining the ranks of Coinbase which does just that.
— Binance (@binance) June 28, 2018
According to Cointelegraph the new platform, Binance Uganda, will be operating for the first time using fiat, in this case the Ugandan Shilling. CEO and founder, Changpeng Zhao, explained that the company is not just chasing more developed markets and sees promise in lesser developed ones;
“We think that crypto has a very strong use case in less developed countries… there’s more money to be made in a more developed country, but we want to distribute crypto to the rest of the world.”
Known on social media as CZ, the Binance boss went on to state that Africa is a big market for crypto since so little of the population has access to a bank account;
“Uganda [is a] really interesting situation, only 11 percent of the population has bank accounts. It’s both a challenge and an opportunity. So it may be easier to adopt cryptocurrency as a form of currency instead of trying to push for bank adoption. It’s an interesting experiment – Africa’s a big market, that’s why we’re there.”
When fiat is involved the KYC and AML regulations have to be adhered to, regardless of the country so Binance will need to work with the framework already put in place by the government. The new exchange will be a separate platform to Binance as we know it but will retain strong links with the mothership.
When questioned about the current state of the markets and falling trade volumes Zhao remained unperturbed putting it down to market over reaction adding that he has seen it happen five to six times per year. He also said that volatility will continue until total market capitalization increases and opening more fiat channels is a path to that increase.
At the time of writing crypto markets had shed another $10 billion on the day, falling to $236 billion.