Binance’s Big Move into the Chinese Market

In a significant shift, Binance, the cryptocurrency giant, is gearing up to launch an over-the-counter (OTC) trading platform specifically for the Chinese yuan. This announcement came from Yi He, Binance’s co-founder and chief marketing officer, during a media session on September 17. With a planned launch in October, this initiative aims to tap into the lucrative Chinese market.

What is OTC Trading?

OTC trading, or over-the-counter trading, is a method where transactions occur directly between two parties, without the supervision of an exchange. It’s often utilized for large transactions to avoid the volatility and slippage associated with traditional exchanges. In China, this method has become particularly popular, especially since the government banned crypto trading back in September 2017.

The Rise of OTC Trading in China

Since the crypto ban, local investors have increasingly turned to OTC trades for purchasing Bitcoin (BTC) and other cryptocurrencies. Instead of going through exchanges, they buy stablecoins like Tether (USDT) through OTC platforms and then convert those to other cryptocurrencies. For many, this has become the primary route to invest in crypto assets.

Binance’s Plans for the Future

According to a spokesperson from Binance, the upcoming OTC onramp will focus exclusively on the Chinese renminbi. Currently, the platform has an OTC trading desk that facilitates large transactions, and it has already seen remarkable success. Back in April 2019, Binance reported a staggering $80 million in profits from OTC trading, showcasing the potential of this marketplace.

A Strategic Return to China

Following its exit from China amid stringent regulations back in 2017, Binance is making calculated moves to reintegrate. Alongside the OTC launch, the company recently invested in a $200 million funding round for Mars Finance, a well-respected blockchain publication based in Beijing. This step indicates a newfound commitment to engage with the Chinese crypto space.

Conclusion

As Binance rolls out its OTC trading platform targeted at the Chinese yuan, it signals not just a return to a market it once fled, but also hints at the evolving landscape of cryptocurrency trading in China. With the demand for digital currencies still strong amongst Chinese investors, Binance’s strategic initiatives could redefine how transactions are conducted in this tightly regulated environment.