Binance To Setup Crypto-Fiat Exchange In Malta

  • Binance close to closing a deal to open a fiat to crypto exchange in Malta
  • Binance has been struggling to secure a license in Japan 
  • Malta looking to open its doors to blockchain business

Yesterday, news broke from Nikkei that the Japanese financial regulatory body – the FSA (Financial Services Agency) – was planning on warning Binance that they must register as an exchange or face legal action. 

Binance appears to have been planning for this eventuality and is looking to setup a crypto-fiat exchange in Malta due to its favourable legal landscape.

CEO Zhao Changpeng recently told Bloomberg it is looking to build a “fiat to crypto exchange” in Malta. According to the CEO, the company is close to signing a deal with the local banks to secure deposits and withdrawals. However, it is uncertain when this exchange is looking to launch.

The choice of Malta may seem strange considering the exchange is predominantly based in Asia; Zhao Changpeng explained the decision to Bloomberg saying that:

“Malta is very progressive when it comes to crypto and fintech.”

Zhao Changpeng Binance CEO

Malta Opens Doors To Blockchain

Jurisdictions such as the U.S. and China have been clamping down on crypto-asset exchanges either shutting them down completely as China have done, or making operations exceedingly difficult as is the case in the U.S.. Listing any altcoins which are deemed a security in the U.S. requires registering with the SEC and CFTC; this compliance is hard to get and expensive. 

Malta is looking to become a hotspot for crypto-asset innovation by relaxing regulations. The small nation may have secured a deal with one of the largest companies in crypto, a move that will surely bring jobs and tax to Malta.

Joseph Muscat, Malta’s prime minister, has said they aim to be “global trailblazers in the regulation of blockchain-based businesses” and recently welcomed Binance to Malta:

Binance Dominance

If the license in Malta is secured, the company will have two operational exchanges: the pre-existing exchange which is purely crypto to crypto with little to no KYC/AML compliance and the fiat to crypto exchange in Malta which will likely require greater KYC and AML procedures in order to secure and maintain its banking partners - they will not want to expose themselves to the risks of money laundering or terrorist financing claims.

To further their dominance in all aspects of crypto-asset trading, they are apparently in development of a “fully decentralised exchange” that will run on a “tailored blockchain” called Binance Chain.

The DEX (decentralised exchange) will work alongside their existing business model which, if successful, would mean Binance will operate three tiers of crypto exchanges. This would surely lock in their place as the world's largest cryptocurrency exchange.

Ripple CEO Brad Garlinghouse Doesn't Think Libra Will Launch Even by End of 2022

In a recent interview, Ripple CEO Brad Garlinghouse explained why he believes that it will be very difficult for Facebook to launch Libra even by the end of 2022.

Garlinghouse's comments came during an interview with Jen Wieczner and Robert Hackett, hosts of Fortune's online show "Balancing the Ledger."

On June 20, two days after the Facebook-led Libra Association launched its website and released the Libra white paper, the Ripple CEO said during an interview with Clifton Leaf, Editor-in-Chief of Fortune, that Ripple was having such an amazing week that he was going to thank Facebook's David Marcus—who is a co-creator of the Libra cryptocurrency and the head of the Calibra wallet project—by sending him a case of champagne:

I will also say that I'm going to send a case of champagne to David Marcus, the guy who runs Libra. The Reason is [that] this week will be the best week of signed contracts at Ripple ever. It's been a massive call to action... I think the banks realized that if Facebook is going to be a competitor in this space, they can't depend on a technology like SWIFT to compete in the marketplace.

Now, however, Garlinghouse seems much more skeptical about the future of Libra.

When Wieczner asked Garlinghouse how he currently feels about Libra, this was his reply:

What happens with Libra and their white paper initiative? Hard to predict. I think that would have been better received had Facebook not been the point of the arrow.

He then explained why the backlash against Libra by financial regulators around the world is hardly surprising, with regulators saying 'whoa, wait a minute... there's a trust issue over here we're concerned about and now you want to go into consumer financial services'. 

Wieczner then asked if Garlinghouse was bullish on Facebook's ability to successfully execute the game plan laid out in the Libra white paper.

He replied:

No... The regulatory headwinds they're facing are substantial... If I were a betting man, I'd take the over-under of the end of 2022 I think that Libra will not have launched.