[Interview] Binance KR, a franchise not a subsidiary
[D.FINE Interview] Global cryptocurrency exchange Binance landed in Korea on April 6 under the name Binance KR. It is targeting domestic users by supporting the Binance KRW (BKRW) coin and offering high liquidity by sharing its global order book. Six members of the blockchain media association, including Join:D, met with Binance CEO Changpeng Zhao for an online interview on April 7. During the interview, he introduced details of Binance’s business plans and offered projections for the cryptocurrency market. Below are edited excerpts from the interview. The interview will be uploaded onto YouTube at 4 p.m. on April 17. Q. What’s the relationship between Binance Inc and Binance KRㆍBXB? A. First of all, BX is Binance’s partner in Korea. Binance KR is in charge of operations. Binance KR is closer to a brand name. It gained the license after negotiations with Binance Inc. Binance KR is closer to a licensed franchise, and therefore should be seen as a separate company. Many of the global exchanges people know are operated by Binance Inc. Q. What is the reason behind entering the Korean market at this stage, when restrictions have become fiercer? A. Binance has been keeping an eye on the Korean market for two and a half years. We discussed entry into Korea with BXB for a year and a half. We considered various options to enter the market, including mergers and acquisitions. Opening a local cryptocurrency exchange was one of the options, but we concluded our expertise in Korea wasn’t sufficient. That’s the reason we decided to form a partnership. Our focus isn’t on the restrictions because we have long term plans. Q. Binance USD’s local partner Paxos is a well-known company, but BXB isn’t. Is it a company that investors are going to be able to trust? Who will be in charge if a problem occurs? A. Paxos at first was also a newborn company. I don’t think whether the partner is well-known or not is an important factor. But a stablecoin should have funds in the bank. Paxos goes through strict auditing under the jurisdiction of the New York State Department of Financial Services. BKRW also goes through auditing. Regulatory authorities can always check the account. Q. In what way is Binance better than an international cryptocurrency exchange? A. Binance provides various coins that are easy to use. It is stable and fast. Accelerating the operation speed by 0.5 seconds makes it difficult to operate stably, although users will hardly notice the speed difference. Considering this, Binance has competitiveness in the product itself. Q. What’s your projection in the Korean market? What potential and risk does the market have? A. Korea is a developed nation in terms of digital assets. Large numbers of people compared to its population have an experience of using digital asset or are using it. The exchange market has developed and local exchanges are operating businesses well. But the problem in Korea is it lacks liquidity. Transactions activity is, but is not connected to the global market. Korea will enjoy high liquidity when it has access to the global market. Q. What is the key business for this year? A. Since we are a decentralization team, it’s difficult to set priorities. Everything is important, but if I had to pick one, I’d say securing local exchanges that are like Binance KR. For now, we are concentrating on making the transaction between legal tender and digital assets in each local market easy. Q. What’s the goal of Binance? A. We want to become the ecosystem of the blockchain. We don’t use the word ‘company’ or ‘corporation.’ People regard Binance as a cryptocurrency exchange because it’s our largest business, but it is only part of the digital asset market. There are diverse fields in the digital asset market, including payments, transfers, investments, financing, games and retail. Binance strives to discover various fields. Binance’s goal is to become a Decentralized Autonomous Organization. Q. What’s your view on the digital asset industry this year? A. In the short-run, it has high variability, but in the long-run, it will become an advantageous market for digital assets and bitcoin. With more people staying at home due to the coronavirus, people’s online activities have increased. Binance traffic has also seen an increase. Currently, the situation is similar to the Great Depression. The policy of quantitative easing is helpful for the cryptocurrency market. We also believe demand for bitcoin and the places that accept bitcoin will increase.