Fiat Korean Won Trading is Hard, So Binance Set to Exploit a Loophole

April 6, 2020 6:30 PM UTC

Binance, the major cryptocurrency exchange and growing Crypto monopolist, is preparing to enter the South Korean market for the first time. Binance’s existing Cloud infrastructure will be used to launch Binance KR. 

While Binance Cloud was launched to issue an exchange service to third parties, the franchising of the brand was not expected. Given that a franchisee has been not disclosed, it is possible that Binance is in fact using its cloud technology to launch a Korean exchange under its own name, but through a new corporate entity owned by it.

Instead of using Korean Won, the fiat currency of South Korea, the exchange will list Binance KRW (BKRW), a stablecoin backed by the South Korean Won (KRW). The advantage of this loophole is that the exchange will not need to comply with fiat regulations in the country. Investors will be allowed to swap KRW to BKRW through Binance’s services, enabling trades to happen on crypto-to-crypto pairs. 

The stablecoin will be utilized for trading Bitcoin, Ethereum, and Binance Coin. Later the exchange will list Tether USD, Binance USD, and other stablecoins for trading. Essentially, Binance is launching a fiat onramp without having to deal with the restrictive fiat-exchange regulations in South Korea. 

Acquisition Lead to Korean Market

The rollout of Binance KR comes immediately after the announcement of Binance’s acquisition of fintech organization BxB, the firm behind KRWb. The exchange had been indicating at a likely extension into the Korean market for some time, but the Korean cryptocurrency matter has been obscure due to unclear regulatory conditions.

Jiho Kang, CEO of Binance Ltd., said: 

“We are committed to bringing a fully compliant world-class digital asset exchange to the Korean market via Binance Cloud and BKRW. We are honored to partner with Binance to work towards our mutual mission of increasing the freedom of money together.” 

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