A new trading exchange has set its sights on the wealthy markets of Japan, Hong Kong and Singapore, and wants to usher in a new era of professionalism for serious bitcoin traders across Asia.
Quoine is being built by a management team of former and current forex traders who have all worked at some of the biggest names in banking, in the world's premier financial centers.
With a philosophy that all financial dealings should be treated "like hygiene" in order to function properly, the team is focusing on security and compliance, with an interface designed to be both professional trader- and amateur-friendly.
The need for a local exchange
Mario Gomez-Lozada, Quoine's CEO and founder, told CoinDesk he was taken aback at the volumes and number of users the exchange had accumulated, despite its beta status:
"I was pleasantly surprised at the level of interest [in Japan] from what I've seen. More than I thought, actually. We just launched a couple of weeks ago and we have some volume now. It was quite active yesterday and today, there are guys making markets in Japan, a few people coming in buying a lot of bitcoin."
He further said statistics showed that about 90% of current users were in Japan, indicating the country's eagerness to trade bitcoin and hunger for a proper exchange.
Tokyo is still a major global financial center, with all the world's major financial institutions maintaining a large presence in the city and a population of traders from all over the world.
Previously, Mt. Gox had been the only major exchange that accepted local bank transfers from Japan and approved identification documents in Japanese language without the need for official translations.
"Japan is a huge market and there's a gap thanks to Mt. Gox. There is a huge opportunity to grow the ecosystem."
Exchange features and future additions
Since January, Gomez-Lozada has been working with a development team based in Vietnam to build Quoine's interface and trading backend. Half that time has been spent testing and trying out new features, he said.
Still in beta, the exchange is available in both English and Japanese languages. Additionally, the developers are also working to include Indonesian, in preparation for a launch in that country in the near future.
Quoine is also more focused on trading features than other digital currency exchanges. For now, it supports a range of fiat currencies, including USD, JPY, SGD, and HKD, along with bitcoin.
The aim is to eventually support all fiat currencies using a background conversion system designed by Gomez-Lozada himself.
The site also offers market, limit and range orders, with live market data and candlestick charts, and is now testing a margin trading system that will eventually boost volumes and allow users to make significantly larger trades.
Wallets, payments and smartphones
As is standard with other exchanges, wallet and payment systems are built in. The company is currently talking to partners in Japan about ways to leverage these services to potentially provide local merchant services to compete with local startups like Bitcheck.
Quoine's clean, two-tone web interface is designed primarily for use on mobile devices and browsers, with a desktop version also coming soon. Gomez-Lozada said the mobile priority was a conscious decision, as most forex traders in Asia preferred to use smartphones.
"This kind of thing you have to be watching all the time, you can't be sitting in front of a computer. When I was a forex trader I never used a desktop."
Once the margin trading system is functioning smoothly, the exchange plans to hold an official launch.
Quoine says it takes up to 24 hours to withdraw funds, including bitcoins, from user accounts. This is due to coins being stored in cold wallets, which Gomez-Lozada said is a tradeoff to allow users to feel more secure.
Checks and balances are run on a daily basis and performed manually to make sure everything matches up, using a process similar to that of banks.
"As a user, I'd prefer an exchange to be like that," Gomez-Lozada added.
In the bitcoin closet
Quoine's management team all come from a forex trading and fintech background, with key members still working at major companies until the time comes when they can 'out' themselves as bitcoiners.
Gomez-Lozada said he hopes his own experience working in finance and trading, along with experience working in Asia, give him the qualifications he needed to run Quoine.
Originally from El Salvador, he emigrated to the US as a teenager where he obtained a Masters in Computer Science before moving to Tokyo.
For about 15 years, he worked at companies like Merrill Lynch and Bank of America in Tokyo and Credit Suisse in Japan and Singapore, holding the CIO position at both companies and managing FICC (fixed income currencies & commodities) technology.
After dabbling in Internet startups, he decided to return to his trading and technology roots and build a "proper exchange" to trade bitcoin, something he and his colleagues were fascinated by.
"We don't think there's that many exchanges right now being run by people who came from finance," he continued.
He also has plenty of experience dealing with regulators and risk control in Japan, and understands what companies need to do in order to stay compliant.
Gomez-Lozada has largely bootstrapped the project from his own savings, but also accepted additional funding from a Japanese angel investor who is a big believer in bitcoin and wanted to join the project.
How will it perform?
CoinDesk was able to road-test the beta exchange and can report that there were no problems getting verified with Japanese language-only documents, funding the account with a local Japanese bank transfer, and buying bitcoin at reasonable market rates.
Withdrawing bitcoins was also seamless, actually taking far less than the cited 24 hours to complete.
Quoine will face immediate competition in its quest to "fill the Mt. Gox void". BitFlyer, an exchange founded by former Goldman Sachs derivatives trader Yuzo Kano, is currently chasing Japanese business with its Japanese language-only site.
Disclaimer: This article should not be viewed as an endorsement of any of the companies mentioned. Please do your own extensive research before considering investing any funds in these products.