Binance Exchange Opens OTC Fiat Desk for Chinese Traders
Binance expands its fiat services, returning some form of fiat trading to the Chinese markets.
Binance re-introduces a form of fiat-to-crypto exchanges to China, years after the country banned the free-for-all exchanges against the Chinese yuan. During Shanghai Blockchain Week, Binance’s co-founder Yi He announced the launch of an OTC desk coming this October.
The decision arrives after Binance already announced the launch of fiat-pegged tokens based on the British pound and the US dollar. Fiat services require additional compliance, and Binance is already performing KYC. This has allowed the Malta-headquartered exchange to offer fiat services through its international Binance.com platform.
China has once again returned as one of the leading markets for digital assets, and even Tether has opened a process to mint yuan-pegged stablecoins. Still, OTC trading is lower in the past months, with relatively stable activity on LocalBitcoins.
The country has banned direct fiat deposits to exchanges, causing other large market operators like OKEx and Huobi to move offshore. Still, Chinese traders participate in crypto-to-crypto exchanges, by also using Tether (USDT) and purchasing stablecoins through other OTC mechanisms.
OTC crypto markets allow for large-scale volumes that do not lead to price slippage and do not affect the exchange rates on the open market. With enough participants, OTC markets allow for large-scale movement of coins and tokens. OTC markets are also suitable for miners, especially those willing to place brand-new coins without going through open market orders. Chinese miners are still taking the lead, boosting Bitcoin’s network to unprecedented hashing activity. To fund their operations, miners sell some of the daily rewards of 1,800 BTC.
China has been a paradox of crypto regulation, as the country both promotes and curbs crypto projects. In September 2017, China banned local ICO sales, and later curbed the activities of local market operators. This led to a deep crash in asset prices, before a dramatic recovery.
At the same time, People’s Bank of China has shared it is ready to launch a digital yuan as close as November, after years of exploring blockchain technology. China also endorses several projects through its regular assessments of top blockchains. There have been no repercussions against large-scale local projects like NEO and TRON (TRX).
Still, Chinese authorities are very wary about risks to personal finance. Most recently, it became clear that Plus Token, a pyramid scheme, was targeting Chinese investors, taking away $3 billion in digital coins.