Binance, the world’s biggest cryptocurrency exchange by trading volume, is planning to expand operations in the United States, according to a Coindesk report. While the exchange did not provide a firm timeline for the launch, it did reveal partnership with a San Francisco-based money services business called BAM Trading for the move.
Coindesk found that BAM Trading has links to Binance through Koi Trading, which received $3 million in funding from the exchange. “We are excited to finally launch Binance US and bring the security, speed, and liquidity of Binance.com to North America,” Binance CEO Changpeng Zhao stated and added that the exchange will “serve the US market in full regulatory compliance.”
The United States is considered among the top three markets for cryptocurrency trading. Coinbase dominates the market but other exchanges, such as Kraken and Poloniex, also have a substantial share. That said, US traders and investors can already access Binance online. Binance’s entry into the crypto ecosystem, as such, may not make much difference to overall rankings for cryptocurrency exchanges.
While it is good for the overall crypto ecosystem, the Chinese exchange’s entry into the US market may be fraught with regulatory bottlenecks. The absence of clear regulation has hampered expansion and inflated operational costs for most cryptocurrency exchanges operating in the country.
Binance has had previous experience dealing with regulation. It relocated headquarters to Malta after a crackdown on crypto exchanges by the Chinese government.
There is also the fact that Binance does not have a fiat-to-crypto facility for trading in USD yet. Most traders use Coinbase to purchase either Bitcoin or Ethereum’s Ether using USD. The cryptocurrencies can, subsequently, be converted to other coins. Whether this circuitous route of accessing the exchange will deter retail investors remains to be seen.
According to Nomics, a startup that provides crypto data services to financial institutions, Binance processed $1.7 billion worth of crypto trades in the last 24 hours. In contrast, Coinbase Pro, a service targeted at institutional investors, had total trading volumes of $243.27 million.