The white label exchange market has allowed otherwise under-equipped companies in developing nations to come up with their own solutions to offer their customers in a more comfortable, local setting.
Huobi saw this trend and in July this year launched Huobi Cloud, a sort of white label exchange that allows the partners of the company build their own platforms and deploy them rapidly without needing to create their own back-end trading elements.
Less than a month later, Huobi Group is announcing partnerships with companies in the Philippines, Indonesia, and Russia, as well as Canada, that will begin using Huobi Cloud to set up their own OTC and cryptocurrency exchanges, Huobi informed Cryptovest by email. It’s worth noting that some of these exchanges may even come up with fiat pairs, as that is something that the white label platform allows.
“Since launching in July, Huobi Cloud has seen a robust response from prospective partners. Together with Huobi Cloud’s corporate partners, we can offer a lower barrier for emerging economies to enter and participate in the burgeoning blockchain ecosystem,” said senior business director David Chen.
It appears that the exchange is primarily focused on establishing partnerships in emerging markets, although this is not exactly the rule. HBUS, a partner of Huobi in the United States, established a cryptocurrency exchange using the company’s software to make trading available in several US states.
Although it’s easy to believe that Huobi’s partners are more on the level of subsidiaries of a parent company, Frank Fu, CEO of HBUS, insisted that this was not the case when he spoke to us.
“HBUS is not an ‘arm,’ ‘subsidiary,’ ‘division,’ or any type of ‘affiliate’ of Huobi,” he said.
It’s not uncommon for smaller companies to establish strategic partnerships with a larger one that offers a back-end platform. The smaller partner benefits from the ability to offer something more powerful to its end users while the larger partner enjoys an easy entry into a new market without having to do all the legal legwork itself.
This strategy may not make Huobi the largest cryptocurrency exchange in the world, but it could easily have it tapping into markets that other exchanges have trouble reaching without opening new headquarters themselves like Binance and OKEx did in Malta.