Binance CEO: ‘Russia Is Our Key Market’

MOSCOW – The line for selfies with Binance CEO Changpeng Zhao seemed endless, even though it was the second photo op of the night.

The cryptocurrency exchange mogul, known as CZ, had already taken photos with Russian fans before the meetup started, and he kept smiling at cameras and shaking hands for half an hour after it ended.

It was CZ’s first visit to Russia, and the turnout showed his popularity with the local crypto scene. The concert hall of the Radisson hotel in central Moscow could hardly fit the roughly 700 people registered for the Oct. 21 event.

The warm feelings were mutual.

“We are always looking for partners in any community, especially in Russia,” CZ told CoinDesk before his talk. “Russia is our key market, one of the most active markets in the global blockchain space.”

When asked on stage who will have the most influence on crypto in the near future, he mentioned Russia’s president Vladimir Putin, drawing laughs from the audience. It was a winking reference to the indecisiveness of Russian regulators.

“In America, the regulators are very distributed, and China is not going to move any time soon,” CZ told the crowd. “There is a potential bill in Russia that may pass very soon, and it will be a good thing for the industry.” (The bill in question is currently dormant in the Russian Parliament.)

Russian expansion

Over the past year, Malta-based Binance, among the world’s largest crypto exchanges, has been expanding aggressively around the world.

It’s opened fiat-to-crypto exchanges in four jurisdictions: Uganda, Jersey, Singapore, and the U.S. last month.

The exchange also launched a fiat on-ramp for the Nigerian currency niara (NGN) and most recently announced that Russian ruble deposits are coming.

But that’s just the start of Binance’s plans for Russia, where CZ told CoinDesk he wants to open an office.

“There is a very strong programmer talent [here],” he said. “On this trip, it is very clear to me that we should look into the developers’ office, not the commercial office, not just yet.”

Further, Binance is looking to bring its stablecoin project, Venus, to Russia.

“We are also working with other potential stablecoin issuers pegged to fiat currencies,” CZ said. “In every location we’re doing that, in Russia specifically, we’re looking for those partners as well.”

The Russian government announced it was working on a national cryptocurrency, the so-called crypto ruble, in January 2018, but since that time, there have been no updates on the project.

Fiat on-ramp

Dealing with fiat is a tricky part of doing crypto business in Russia, as cryptocurrencies have no legal status in the country yet, and crypto-related companies usually register as providing IT services and the like.

Only a handful of smaller exchanges like EXMO, Yobit, Livecoin and Kuna offer ruble deposits via partnerships with acquiring services that facilitate electronic payments and take care of the fiat bank accounts.

Without naming names, CZ said Binance is in talks with banks and acquiring services in Russia to provide a fiat gateway for the ruble.

“We’re basically doing what other exchanges are doing here, in Russia,” CZ said. “We are discussing with banks, but it’s not official yet. The banks are at a very early stage. Payment services will probably come up first.”

In fact, the ruble deposits were expected to be up and running already, CZ said, but technical issues delayed the launch by a couple of weeks — Binance is tentatively planning it for early November now.

Other initiatives

Meanwhile, CZ said he’s happy with the performance of the new subsidiary, Binance U.S., which opened in September. Currently, the platform sees about $14 million in daily trading volume, according to the market data websites CoinMarketCap, CoinGecko and Cryptocompare.

The Nevada-licensed trust company Prime Trust provides the fiat on-ramp and banking relationship for Binance U.S., CZ said. (Prime Trust isn’t FDIC-insured, but it has accounts with institutions that are.) He is hoping that institutional investors will ultimately do the majority of trading on the U.S. platform.

However, institutions are highly interested in trading derivatives, and this option is currently unavailable for U.S. traders: a warning about it pops up in front of any new user trying to sign up for Binance Futures.

The futures platform, nevertheless, has been gathering speed during its first months of existence, even surpassing Binance’s bitcoin spot market on some days. To fire up things even more, the exchange added an unprecedented 125x leverage for futures contracts earlier this month.

This leverage, higher than what’s available from other bitcoin futures venues, raised some eyebrows and sarcastic tweets which suggested that 125x is a perfect chance for traders to get “rekt.” CZ says the unprecedented high leverage is something the Binance users have been asking for, and would differentiate the exchange from competitors.

“It’s a little bit of marketing, a PR game as well, but you also want to be a little bit innovative,” he said. “We copy a lot of stuff from a lot of people, but we also want to be a little bit different.”

Image of CZ courtesy of Binance