Binance will soon be launching a digital asset trading platform that can be rebranded by smaller exchanges for their local markets.
Binance Cloud will offer local exchanges spot market and futures trading, as well as local bank API integrations and peer-to-peer (P2P) fiat-to-cryptocurrency exchange services, the company will say in a statement this week.
Implementing a product like Binance Cloud would relieve potential exchange operators of the software burdens involved in security and scalability. That gives them more time to worry about, say, getting the proper licenses and registrations in their jurisdiction.
Binance Cloud will offer the matching engine, security controls and liquidity of the main Binance.com exchange. So while an exchange may have its own branding and local fiat currency, the back end will basically be Binance itself, which will bring the benefit of more liquidity, albeit indirectly, and potentially in places where Binance doesn’t currently operate.
“The Binance Cloud service is an all-in-one solution, featuring an easy-to-use dashboard that allows customers to manage funds, trading pairs and coin listings, as well as multilingual support, depth-sharing with the Binance.com global exchange, and more opportunities to collaborate with the ecosystem," the company said.
Soon, Binance also plans adding “staking and OTC (over-the-counter) trading services, as well as token launch capabilities via an IEO (initial exchange offering) platform.
This could mean Binance would have to compete with AlphaPoint, one of the largest infrastructure providers on the cryptocurrency exchange market today. Founded in 2013, AlphaPoint provides software services to some of the largest exchanges in the world, although it doesn't discuss specific clients.
Exchanges are not easy to build. There are many elements to consider such as order types and matching as well as other features. Security and scaling during massive bull runs are also huge concerns for exchanges.
Security has been an issue for Binance itself. It was breached in 2019 with $40.7 million stolen after hackers accessed exchange users’ API keys and 2FA codes. While an explanation on further technical details was never published on the hack, the exchange covered the losses via its “Secure Asset Fund for Users” (SAFU) insurance fund.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.