Binance, in its quest to broaden and expand the cryptocurrency market place, is looking to return to the technology’s once homeland – China. According to Yi He, Binance co-founder and chief marketing officer (CMO), the major cryptocurrency exchange will be launching an over-the-counter (OTC) trading platform for Chinese yuan in October.
China is a difficult nut to crack for cryptocurrency business, despite the country working towards the launch of its own central bank run cryptocurrency. Once the mecca of Bitcoin mining and trading, the government acted swiftly through 2017; first it banned ICOs, then in September of that year, put a halt to Bitcoin exchange business.
This was an effective play by the government. In 2017, Chinese exchanges accounted for over 90 percent of the global crypto industry; however, after the crackdown, that figure dropped to a feeble 1 percent.
That being said, Bitcoin has not died in China, rather the means of acquiring the digital token has changed. OTC trading has become the primary source for the Chinese to buy Bitcoin with fiat. OTC trading involves a direct deal between two interested parties and is usually conducted without supervision of exchanges and is a workaround for the Chinese ban.
Now, Binance is taking a bold step through OTC to try and ingratiate itself back into China after it too fled among the exchange crackdown of 2017. In fact, Binance is on a bit of a roll with the Chinese market as the company has participated in a $200 million funding round of Beijing-based Mars Finance, a local crypto and blockchain publication.
Binance seems to have an eye on this hungry market, and also is aware of the returns it can offer having seen an immense surge in OTC trading, reportedly recording nearly $80 million in profits.
The success of restarting the Chinese market – under the stern and controlled regulations – would go a long way to reinvigorate the Bitcoin market. Since the 2017 shut down, little mind has been paid to the former powerhouse of cryptocurrency.
As Binance start to look eastward again, and China itself develops its own token offering, there could be a fresh wave of change happening that could welcome back a huge swath of crypto-savvy investors and innovators.
However, it remains to be seen just how much of a rebirth the government will allow, and if it does open the doors to cryptocurrency and blockchain again, how much of it will it want to control?