Hong Kong, CHINA – Italy is known for high fashion and flashy cars, but the third largest economy in the eurozone may also lead to its undoing. The embattled euro is continuing to show signs of weakness with yields on Italy’s 10-year government bonds hitting as high as 3 percent at one point. And with Italian debt at a staggering US$2.95 trillion, the same as the next two largest European Union members, France and Germany, a financial crisis in Italy will be difficult for its northern neighbors to bail out. Sensing that a fallout may be imminent, Binance, one of the world’s largest cryptocurrency exchanges by trading volume is offering Europeans a way out of their declining euro and has announced that it will soon allow customers to use euros to trade on its platform.
Speaking to Bloomberg on Monday, Binance CEO Changpeng Zhao says that the cryptocurrency exchange will allow euro trading later this year from its Malta operations. And while Zhao says that other fiat currencies will likely be added to the lineup, only the euro has been confirmed for now.
With cryptocurrency exchanges facing increasing competition from each other, Binance has been charting its stellar growth and diversifying into more areas, including a US$1 billion crypto investment fund. Allowing customers to swap fiat currencies for cryptocurrencies and digital tokens listed on Binance will be a first for the exchange. Typically pure play cryptocurrency exchanges such as Binance would need traders to convert their fiat currency into more liquid cryptocurrencies such as Ethereum or Bitcoin before trading in other digital tokens on their platform, the move by Binance would eliminate the need for the additional step and will no doubt be welcome.
Founded last July, Binance made a staggering US$150 million profit in the first quarter of this year alone, with daily trading averaging between US$1.4 billion and US$1.5 billion, Zhao said. But rival cryptocurrency exchanges such as OKEx and Huobi have been turning up the heat as well, leading Binance to look for other areas of growth. Binance’s user growth has been nothing short of phenomenal, starting this year with 2 million users, Binance now boasts over 9 million users. And although Bitcoin is well down from the highs it achieved last December, with major cryptocurrencies shedding US$42 billion of market value following news of a hack at a minor South Korean cryptocurrency exchange Coinrail, there is no sign that interest in cryptocurrency trading has waned.
Zhao told Bloomberg that Binance will soon receive an exchange license from Jersey in the Channel Islands, and plans to open an office there with as many as 100 staff. According to Zhao, the company is also in talks with authorities and banks in Taiwan. Taiwan has seen a resurgence of interest in cryptocurrency and blockchain companies, with national lawmakers lobbying Taipei to regulate to promote the growth of the nascent sector.