Binance CEO, Changpeng Zhao, or CZ as many call him, made a keynote speech at Blockchain Partners Summit in Seoul, emphasising the importance of the local market and how the cryptocurrency exchange will enrich its community. The event was also attended by He Yi, the company’s co-founder, and Ella Zhang, head of Binance Labs.
In Korea Binance remains a preferred exchange among 40% of crypto users. Yet Binance doesn’t support fiat currency. So why has Binance grown so quickly?
For one, CZ calls it luck – being at the right place at the right time. Another reason is that the Binance product and service are nearly the best in the industry. But most importantly, the value system that the company has pursued from the very start. Everything is done with ethics in mind. CZ calls on his competitors to follow them along the same path. Doing righteous things means the company has to deal with a number of difficult decisions, often at its own expense to put customers’ interests ahead.
Many say that to be listed on Binance requires outrageous outlays of cash. This myth has been debunked by the CEO himself. To be listed on the exchange all you have to do is to submit an application form on the website. A dedicated team reviews the application and makes a decision. Some companies have been listed for free, according to CZ. And if you don’t hear from them within a couple of weeks, simply resubmit the application. Updating the input data is the indication you remain active within the company. Binance doesn’t share any email addresses. This way the email box doesn’t get flooded and there’s no biased influence that comes from the first contact.
South Korea’s regulatory body has now changed its position to ‘favourable’ towards ICOs. Korea’s regulation has gone back and forth on the issue, alternating between allowing and not allowing crypto exchanges. The Korean market landscape is quite unique, with cryptocurrency awareness rate being at nearly 100%. And any politician that doesn’t support the crypto industry will find themselves out of the job eventually, said CZ. Yet Korean regulators do not have a clear stance on the crypto. It can be considered good and bad. Countries want to lead the industry but at the same time they make the regulation tough. Having loose laws can on the contrary create an adverse effect. CZ has been spending a lot of time in Malta and recommends other lawmakers to take on best practices from the Maltese government.
Binance does not have a very strong presence in Korea, only a few community members. It “will not touch” the national currency, Korean won, until there’s more clarity from the government.
On centralised vs decentralised exchanges
CZ believes that in the future decentralised crypto exchanges will overtake centralised ones. Binance has been working on a decentralised exchange, hoping to produce a prototype in a couple of months. Decentralised exchanges (DE) will be appearing gradually and will not replace centralised ones in the short run. There’re certain advantages to this. Decentralised exchanges do not host the custody of your coin, you host it yourself – it might not be a comforting news for those who are not technologically savvy, as centralised exchanges provide a more secure storage place. Binance has been a target of numerous hacker attacks, taking measures to deflect them.
Decentralised exchanges provide more anonymity, so it’s just an address exchanging with another address. But as of today DE remain slower, making it more expensive to transact. Given that, the liquidity will always be worse, which translates into higher costs for traders. Yet Binance is working very actively on DE, planning in the future to “disrupt itself”. The key focus is speed rather than features.
On markets and other things
Binance has also created Binance Labs, a blockchain technology incubator that helps promising startups with pre-ICO financing. To reach out, you simply need to fill out a short application form through the website.
Speaking of his typical day, CZ says it’s definitely not looking at white papers. Most of the time is spent at the exchange. The company is working tirelessly at releasing new features and doing promo events. CZ himself is focused on the technical aspect of the business rather than public appearances.
Touching on the markets and ICOs, CZ doesn’t agree with people who think we’re in a bear market. All the data indicates that the price should be heading up. The amount of funds raised through ICOs has already reached $14 billion this year, or more than four times raised during entire 2017. So more money is flowing in, hence the price should be climbing as well. Institutional investors are starting to explore the space too. Binance gets a lot of requests on KYC and ‘buy’ orders. A recent such request was for half a million of Bitcoin.
Many countries are now competing for blockchain business, thanks to Malta, says CZ. Countries that do now allow ICO are missing big time, as there’s no currently better way to attract a foreign direct investment. In general, the regulation in past 2-3 months have struck a positive cord.
Talking about the future, CZ perceives the market for millions of coins. Every country, entity would want to issue one, every asset could be tokenised. Hence exchanges will be playing a greater role. Today’s exchange systems cannot handle that number of coins. But we must get ready for such a scenario.
Binance’s mission is to reach out to the world. It’s not just about developed countries like the US, Korea or China, but less evolved places that have a potential to employ blockchain. That’s why Binance has been probing its way into Africa and other places. One of Binance’s ambitious goals is to reach 1 billion users, currently it is slightly shy of 10 million.