What is the Crypto Cloud?
What do you do in the crypto winter if you are Binance? Invent a whole new industry, apparently.
Binance wants to be the leader of the Crypto Cloud, or the Google of the digital asset world, if you prefer that terminology.
Binance has secured itself over 50% of the crypto exchange market, and now it wants to offer this ability to new businesses. So it wants to enable businesses and its partners to be able to set up exchanges themselves using Binance’s own infrastructure and technology.
They see it as an additional path to profitability, in an effort to be the first-comer like AWS, of the Crypto Exchange Cloud. You can read about it on their blog here.
Binance has been innovative, so this doesn’t surprise me. But I’m uncertain how they can spin such a B2B product with the current levels of demand, saturation and competition. Binance Cloud will mirror core functionalities of the Binance global exchange, ranging from its robust matching engine, trading risk controls and big data security system.
At least it will be convenient for would-be clients. The solution will also support dashboard for managing funds, multilingual functionality, as well as a range of trading pairs and coin listings.
White-label crypto exchange infrastructure is not new to the industry but perhaps Binance could do this better than others. Binance Cloud’s features include crypto spot market and futures trading as well as local bank API integrations and peer-to-peer exchange services from fiat to crypto. With the emergence of central bank digital currencies, this industry has some potential.
It’s a bit of a desperate move in that Binance Cloud will allow those people to run their own exchanges in local markets that are far from Binance “both fiscally and also culturally or just knowledge-wise” to date. But with a failed ICO sector, FTC lawsuits and the U.S. falling behind in blockchain innovation, I’m uncertain about the viability of setting up yet another crypto exchange post 2019.
Originally based in Malta, Binance will now purportedly expand its regulatory compliance by acquiring a license from the Monetary Authority of Singapore. Binance is one of the few crypto based startups of the Bitcoin boom era that can survive the crypto winter, whatever form it takes.
Still having a B2B and “Cloud” component is a good idea as a business model, even if it makes little sense in the current cryptocurrency and digital asset market context. It could scale into something more meaningful over time and I suppose you could say it’s a strategic revenue shift for Binance.
In the era of the Cloud driving considerable revenues on super platforms like Amazon, Alibaba and Microsoft, even crypto wants a tiny bite. Good luck to Binance!
Sources: Intelprise and Bloomberg