Why Binance Chose Africa to Launch its First Fiat Exchange: Wei Zhou
“Our goal is to have at least two fiat exchanges on each continent,” says Binance CFO Wei Zhou. It’s a new direction for the mostly crypto-only exchange, which launched its first fiat exchange in Uganda and plans to move into markets like Europe soon. Zhou explains in this video interview at Beyond Blocks Summit Bangkok why Binance chose Africa as its launching pad, and what the company has up its sleeve for the coming years.
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Binance’s Target: Billions of Users
Binance itself launched in July 2017 but now has over 10 million accounts and is one of the industry’s best-known names — a remarkable achievement for a relatively new exchange. Zhou is also a newcomer to the company, having come from Wall Street and other well-known companies to his new position in September 2018.
“One of the biggest challengers investors face is proper channels to buy and sell cryptocurrency in and out of fiat. So we’re looking to basically build fiat on-ramps and off-ramps in different parts of the world.”
“We want to 10x (our user base) to 100 million and then 10x that again to a billion,” Zhou says of Binance’s global ambitions. After Africa, it plans to set up fiat exchanges in European and Asian jurisdictions — namely Singapore (SGD), Malta and Jersey (EUR).
Zhou: Why Binance Is Starting in Africa
Africa might seem an interesting choice as a starting point. However, as Zhou points out, the continent presents a great opportunity — not just in terms of cryptocurrency adoption but more generally in mobile internet and mobile money users.
“A lot of the use cases for cryptocurrency — store of value, remittances, all of that — are in Africa. If we can leverage that into building a financial services provider in the continent, that would be amazing. Currently only about 15 percent have access to traditional banking services.”
Binance had met with regulators and high-level government officials in Uganda and elsewhere, Zhou adds, who have supported the projects and recognized Binance’s work so far.
Of Uganda’s population of 40 million, only about 4 million have mobile phones, Zhou says. But that’s growing fast, and the demographics are younger on average. Binance will offer other money services (such as a payment infrastructure) as well as just crypto-fiat exchange.
The Uganda fiat exchange is aimed at locals and not Chinese investors with African contacts, as some (including this writer) have hinted in the past. However Chinese residents in Africa could well represent a user base there.
Offering financial alternatives could help locals who frequently cross borders. Uganda is a physically small country and people who cross into neighboring Tanzania and Kenya must convert local fiat currencies to spend them (and pay all the requisite fees to do so).
Watch the interview above for a more complete picture of Binance’s plans and rationale for its new crypto/fiat and other services.
Can Binance create a new financial infrastructure for all markets of the world? Let us know what you think in the comments.
Images and video via Geology.com, Bitsonline, Jon Southurst