This free preview of Global Coin Research is offered to our loyal readers as a representation of the unique information and insights our members receive weekly. If you’d like to receive all subscription content on our site and via our weekly newsletter, join here!?
As you may have read in the last few weeks, we are rolling out a new post series for our Premium readers. It will feature recurring updates on the state of Asia Cryptocurrency and Blockchain. We have come up with 4 high-level topics, and every week we will be writing about one of these topics, and rotating through them in the following order.
China (with commentary on recent regulatory trends, media sentiment, and touching on exchanges and company developments)
Asia Countries ex-China (with commentary on regulations, media sentiments, crypto projects, exchanges, and company developments)
Exchanges And Mining (Binance, Huobi, Upbit, Bitmain, Canaan, etc)
Crypto Projects and Funding Trends
Check out our previous pieces on China, Japan, Korea, Singapore, etc. This week, we are discussing Exchanges, specifically the Asian exchanges – Binance, OKEx, Huobi along with those that made headlines in Korea and Japan in the recent months.
So many things have happened in the exchange world this past month. Since this is the first of our first monthly series on the topic, we are providing a deep-dive into Exchanges first, and will do another one on Mining in the next monthly series.
Check it out and let us know if it’s helpful for you. Thank you for reading.
This is part 1 of the 2 of the update this week, and we will be discussing Binance in this post. In the second post of this week’s series, we’ll be discussing OKEx and Huobi and the exchanges happenings in Korea and Japan.
The Quick Take
How is Binance able to do everything? And what does CZ want? A look at Binance new home in Singapore, its stablecoin strategy, and Binance Info new Gold Label.
What’s been happening:
Binance in late November began publishing weekly progress updates on Medium, deviating from its monthly update cadence. Indeed, the company had alot to announce, and among them, here are some standout:
-In the last month, Binance has accepted a strategic investment from Vertex Ventures, a leading venture capital network backed by LPs like Temasek Holdings, a Singaporean holding company owned by the Government of Singapore.
-Additionally, the company just announced that they are holding their first ownBinance Blockchain Week with Justin Sun from TRON, NEO founder Da Hongfei, Cumberland Asia, Ripple exec in January 2019. Registration hasn’t open yet.
-CZ discussed company’s plans to create its own blockchain, called Binance Chain, that would enable the creation of new currencies and facilitate ICOs similar to Ethereum. In his own words: “Binance is pushing for blockchain adoption and doing many things to help advancement of the industry. E.g. we will have the Binance Chain ready in the coming months, on which millions of projects can easily issue tokens.”
-Another announcement was that Binance is replacing its USDT stable coin with a basket of stablecoins. Specifically, the website now has a stablecoin pair section marked as “USD?”. The company recently added Circle’s USD-pegged stablecoin USD Coin (USDC). Prior to that, it had supported Paxos’ USD-pegged asset dubbed PAX and TrueUSD (TUSD). The support of PAX and USDC could be an attempt for Binance to take market share from the US market as Binance currently does not have an operating entity there. More on that and Binance’sstablecoin strategy below.
–Binance Coin gets adopted by Decencentraland. The company has said that Decentraland is one of the few working products in the space – “Binance is supporting blockchain-driven gaming innovations by working with Decentraland. Under this collaboration, you can use Binance Coin to participate in Decentraland’s upcoming auction for virtual land parcels, called LAND. You can then use Trust Wallet, Binance’s official crypto wallet app with a built-in dApp browser, to take part in the LAND auction.”
-Another advance is Binance Info, an information portal for coins and tokens. Binance Info has been around since early 2018, and now the project is launching an extension product called the Gold Label verification. Head of Binance Info says: “we hope this project can promote transparency in information, raise the industry standard for quality of information, and help the blockchain space to mature […] We believe in the power of community and in the choice of users. The trustworthiness of the Gold Label comes from the users.”
What’s this all means:
Now, we’ve listed all these announcements and launches, what does this all means?
First and foremost, Binance is doubling down on Singapore. CZ has been searching for, and has finally found a home in Singapore since Malta. The Singapore government has allowed Binance to create a fiat to crypto exchange, and has shown support by having one of its government affiliates taking an investment in the company.
While Malta has indeed been a home for Binance for sometime, in no way can it rival what Singapore can offer as a hub for attracting first world capital and for having a mature capital markets infrastructure. I predict that next year, Singapore will become the place for ICOs, and institutional trading, and in many more ways better set-up and welcoming than that of Korea and Japan’s market, given the transparency and clarity in which the Singaporean regulators have been approaching with and executing in this space.
If you understand what Singapore wants, which I’ve written last week in my country-specific updates, here are some highlights:
Singapore historically has not been a technology-focused country. In the past, it has been an active financial hub in Asia, and it looks to continue to do so by focusing on 3 things in Crypto:
Providing the most transparent and detailed regulations around ICOs and cryptocurrencies for companies to operate around
Investing its government funds into Blockchain technology
Building in-house blockchain technology or with a partner to improve its financial hub platform in efficiency and performance
Singapore has already shown that they are able to achieve 1, and they are doing 2 by investing in Binance along with a number of other companies through its investment affiliates. As for 3, I edited the point slightly from last week and added the bold part, “or with a partner”. I realized that the Singapore authorities, not being equipped to build the technology infrastructure quickly themselves, may partner more closely with an entity like Binance to reach those goals. Their relationship is mutually beneficial, but this is particularly a big break for Binance since the company has been trying to find a more established country to gain foothold since China’s ban last year.
If you are interested in reading more, checkout in more detail of what Singapore regulators have been doing and our thoughts there. Given that trading continues to be one of the most thriving business in this space, we are going to see disproportional growth in trading tool, technologies and platforms. As such, Singapore, along with Hong Kong, as existing financial hubs that are friendly to crypto trading and exchanges, are all going to play a bigger part of the global crypto space next year.
Now with one of CZ biggest concerns resolved as Binance finds footing in Singapore, the company is making moves quickly. For example, it’s launching Binance Blockchain Week immediately in January. The time gap between when they announced the conference, which was this past week, to the actual conference date (January 19-22nd) is astounding. If you look at the attendees list- it’s many Asian projects (TRON, NEO) and trading companies (Cumberland), as Binance tries to solidify its presence in Asia for good.
CZ has also started focusing on bigger things beyond Binance DEX. The Binance Chain is a way for Binance to capitalize on what the industry has failed to do and CZ says so. According to Cointelegraph, CZ says that “these new plans [Binance chain] actually indicate an old vision of crypto, which will expectedly lead to increasing its adoption on a global scale’. And in order to reach a fundamental ‘payment adoption increase, [the company will be] pushing really hard into that space, since their original intent hasn’t taken off for some reason.'”
Onto stablecoins. Although Binance is listing various stablecoins onto its platform, various data points over time make it hard to not believe that the company is paving way to making its BNB coin to become the ultimate stablecoin. Exchange stablecoin has become a commodity, and forming a stablecoin basket is simply a way to ensure that Binancedo not miss out on the trading volume, especially with a large market like the US where they do not have a physical presence.
Here is some evidence that points to why BNB will become the stablecoin in the next year. At the beginning of 2018, as the market began pacing downwards, CZ’s was quoted saying “BNB price held up pretty nicely throughout the quarter. Many people used BNB as the “stable/safety coin” during the bear market. This is very comforting to know and such a compliment.” Fast forward to now, we’ve seen that this trend has continued. In the last few months, as we entered a full bear market, the only coin that’s held up in the top 10 without correlating with Bitcoin movement has been BNB, which I’m skeptical to believe that it’s just pure Mr. Market’s doing.
Additionally, over the last year, Binance is also the only exchange coin that’s gained listing on over 5+ exchanges – LBank, Exrates, Bankor Network, IDEX, AirSwap, EtherDelta, DDex, Trade Satoshi, Gate.io, p2pb2b, Braziliex, LBank. This report by BD Center, a digital marketing firm, did some comprehensive research on all the exchanges and their token listings. The information tracked there is not 100% accurate but it’s quite extensive and directiona.
And as part of Binance’s plan to make BNB coin more widely used and distributed, it’s also increasing its adoption strategies quickly. Below is an image from the Binance team that I think summarizes well of how Binance is thinking about its BNB coin adoption ecosystem. BNB is branching out into a number of applications- consumer use cases in a number of industry verticals, trading availability across all exchanges and platforms, and also with a myriad of tools to offer storage.
The Binance team has said in their announcement with Decentraland: “We have brought multiple use cases for Binance Coin, which currently can be used in more than 100 ways beyond scoring 25% discounts on Binance trading fees. Right now, our Binancians can spend their BNB beyond the trading world — on real-world purchases such as tours, restaurant meals, flights, and even whole planes. Now, we’re expanding BNB’s use case into virtual world, thanks to Decentraland accepting BNB in its upcoming LAND auction.”
Lastly, on the Binance Info Gold Label Project. While it is commendable that Binance is looking to promote transparency in the crypto industry and provide coin and token holders with better information access, the ultimate customers that it should try to please are the Monetary Authority of Singapore, and the US’s Securities and Exchange Commission.
It is only a matter of time when those regulators will demand company data. And if Binance acquires the mindshare of companies, as well as the favorability of regulators, it’ll have the opportunity to be the designated entity that sets the global industry standards.
What will happen in the next 6 month will be interesting to watch.Binance may start stepping on the gas pedal to onboard companies onto its Gold Label, and it’ll be especially effective if it makes it as part of the mandate for companies that want to ICO on its Binance Chain. The team has said that they “feel information transparency is one of the most important aspects for investor protection’ and that they “may require Binance listed coins to publish weekly updates soon.”
In the second part of this series, we’ll be discussing OKEx and Huobi and the exchanges in Korea and Japan.