The world’s biggest cryptocurrency exchange is making a big move into Southeast Asia.
Binance, which in 15 months has gone from nothing to about US$750 million in trades every day, has just secured funding from Vertex Ventures. The Singapore VC said it “will support Binance in building a fiat-crypto exchange in Singapore, as well as other fiat-crypto gateways and services throughout Southeast Asia.”
Although it initially avoided dealing in conventional currencies, Binance opened its first fiat-to-crypto service in Uganda last week. A similar exchange in Singapore, already in closed beta testing, is slated to open later this year.
Binance’s choice of Singapore isn’t too surprising as the city-state is rated as the third most favorable country for initial coin offerings (ICO) as well as a hub for all kinds of crypto projects.
Aside from its exchange, Tokyo-based Binance has a US$1 billion fund called Binance Labs to incubate and invest in cryptocurrency and blockchain startups.
Binance’s exchange takes a 0.1 percent fee from each of its 1.4 million transactions per second – which drops to 0.005 percent if users pay commission in Binance Coin (BNB), the firm’s own token.
Its ICO with BNB saw it raise US$15 million shortly after the exchange’s mid-2017 debut. The token has gone on to perform strongly since then – in contrast to plummeting Bitcoin and XRP prices – as it has risen from a value of US$0.11 to US$9.80. BNB now has a market cap of close to US$1.3 billion.
So why does Binance need VC cash when it has all that digital coin collateral? It’s not really about the money. As Binance representative explained to Tech in Asia: “Our partnership with Vertex isn’t so much about the capital as it is about finding the right partner for our fiat exchange expansions. Given Vertex Ventures’ understanding of disruptive internet and technology companies, especially in the APAC region, our partnership represents a long-term commitment we have to building out the ecosystem in this region.”
The startup also said it’s “actively evaluating” which nations to pick for other projects across Southeast Asia.