In a move to entrench its market position in the face of significant challenges, the worldwide crypto exchange behemoth Binance announced to expand its zero-fee trading to Argentine, Brazilian, and South African currency spot trading pairs. This is viewed as an attempt to proliferate trading of prominent cryptocurrencies including the likes of Bitcoin, Ether (ETH) and Tether’s USDT stablecoin against the mentioned fiat currencies, aiming to nullify the maker’s fees; traders who place new orders into the market.
However, this strategic expansion comes amidst the backdrop of confronting legal and regulatory hurdles, especially in the U.S. and Europe. Not to forget, this occurs in an era when the crypto trading volumes have reached abysmal numbers last witnessed in 2019, striking down potential revenue sources. Binance in its previous month closed its crypto payments service ‘Connect’, drawing its focus to its key product suite and suspending issuing of its co-branded debit cards in the regions spanning Latin America and Middle East.
Musing on the brighter side, this strategy seems logical considering the rising crypto adoption in developing countries, exposed in a study by Chainalysis last year. Specifically, countries grappling with fragile financial ecosystems like Argentina, are resorting to digital assets to prop up value or as a protective measure against potential volatility in their native fiat currencies. Furthermore, Binance is no stranger to zero-fee promotions, it had previously allowed the same on trading with off-shore stablecoins, namely TrueUSD (TUSD) and First Digital’s FDUSD.
Clearly, the exchange is aiming to capitalise on growing crypto adoption in developing regions by easing its trading fee structures. Yet, it cannot afford to overlook potential legal and compliance issues looming on its horizon. A tightrope walk, might we say? Where will the exchange tilt – towards consolidation in new markets, or tightening its legal and regulatory standing in mainstream trading hubs? Only time can reveal how this precarious ‘balancing act’ plays out.
Source: Coindesk
