World’s biggest cryptocurrency exchange wants to open South African bank account

Binance would love to work with local banks to open an account in South Africa, co-founder and CEO “CZ” Changpeng Zhao has told MyBroadband.

Zhao was responding to questions about Binance delisting ZAR trading pairs and whether it would consider launching support for rand deposits.

“If there are local banks willing to work with Binance to open bank accounts, we would love to do that because… it’s a better user experience.”

Binance operates the world’s biggest centralised exchange for cryptocurrencies by trading volumes.

He said that although it sounds counterintuitive, working with cryptocurrency exchanges and allowing them to operate is better for regulators than trying to block them.

“It offers regulators much more clarity and much more data about what is flowing into Binance and what is flowing out,” said Zhao.

“Whereas today, people trade using cash and peer-to-peer bank transfers, and that data is actually very unclear to regulators.”

Zhao said the best way foreign exchange monitoring boards can enforce their currency controls is to allow banks to work with cryptocurrency exchanges.

“And the best way to do that is to issue licences. Once you issue licences to crypto exchanges, you can demand data.”

Binance added South African rand trading pairs for bitcoin, ether, its own BNB token, and USD tether (USDT) on 27 March 2020.

It abruptly terminated the trading pairs a year later.

Initial reports suggested Binance ended rand trading because volumes on the trading pairs were too low.

However, Zhao said that, as he recalls, Binance delisted its rand trading pairs to comply with a regulatory request.

“We do have to respect local regulations,” he said.

During the past year, South African financial regulators have cracked down on various cryptocurrency-related activities after promising they would “foster innovation” by “creating an enabling regulatory environment”.

The crackdowns included:

Standard Bank also served account termination notices on several automated cryptocurrency arbitrage services banking with them.

This resulted in several South African cryptocurrency trading platforms shutting down their arbitrage services, including Ovex and VALR.

The Financial Sector Conduct Authority (FSCA) also cracked down on leveraged and derivates trading services offered by major international players like Binance, FTX, and ByBit.

According to the FSCA, these platforms didn’t have the required licence to offer margin trading and other derivates in South Africa.

FTX, with the help of South African cryptocurrency exchange Ovex, managed to continue offering margin trading. It now operates under an Ovex Financial Service Provider licence.

Asked if the size of the South African market was worth the effort to deal with the regulatory issues in the country, Zhao assured it was.

“South Africa is one of the most important markets in Africa,” said Zhao.

“It is one of the strongest economies in Africa. It is obviously a very important market.”

Binance announced on Monday that it had hired former HSBC South Africa executive Hannes Wessels as its local country manager.

Now read: Bitcoin tops $25,000 for first time in two months

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World’s biggest cryptocurrency exchange wants to open South African bank account