ethereumworldnews.com
Binance, one of the leading cryptocurrency exchanges in the world, has plans to expand its margin trading department to include lending services.
During the recently held meetup in London, Binance’s CEO, Changpeng Zhao (CZ), dropped a hint that lending services tied to the exchange’s margin trading may be launched this month. Last month, Binance noted that the addition of margin trading was an “effort to push the industry forward and towards the freedom of money.”
While responding to questions asked during an AMA session, Zhao said:
“We’re launching quite a number of other things. Binance Jersey will ramp up its service in Europe. We just launched margin trading. We are about to launch Binance Futures, but before that, around mid-August, we’re going to launch lending.”
Interestingly, Binance users lending their coins for margin trading will also be able to lend “other users money for many purposes.” Lenders will get the interest paid by the borrowers “for that kind of loan. So we expect to bring a lot more custodians onto Binance.com,” CZ added.
Unfortunately, with Binance approaching the United States market with caution, US citizens may not be able to enjoy the new product. For example, a Redditor said:
“It really sucks to be a US citizen. They do not want us to have money. They only want us as fodder to future wars.”
It’s More Profitable to Dominate than to Scam
Fortunately, while appreciating the move by Zhao to introduce lending and more custodians, saiiboost, a Redditor, said:
“CZ has already stated that he strongly believes in producing the best possible product. Why? Well, look at how massive Binance has become being the top dog. CZ sees it in his best interest to keep Binance legit and successful; it’s far more profitable to dominate the (crypto) scene rather than to scam it. This space is just starting off. Imagine what Binance will be when we get into multiple trillions. Binance may rival Amazon in value.”
Plans to introduce lending hence more coin custodians come just weeks after Binance launched its margin trading platform.
In July, the exchange launched version 2.0 of its platform effectively activating margin trading. However, although the exchange indicated that it would enable a 20X leverage, it started with a X3 leverage.
Yi He, Binance’s co-founder, noted that:
“Though the current cryptocurrency market and legacy platforms for margin trading pose greater risks and benefits at the same time, we are confident that its development coupled with more knowledge on proper risk management will help realize greater benefits in the long run.”
Crypto Custodians Help Reduce the Gap between Crypto and Fiat Exchanges
Nonetheless, according to Tim Enneking, Managing Director, Digital Capital Management, the introduction of custodians is intended to put cryptocurrency exchanges at par with fiat currency exchanges.
While speaking to Forbes, Enneking said:
“Crypto is working towards the same desired end-state of where we are today with fiat exchanges. The market is forming the same separations of parties to create the triumvirate of broker dealers, qualified custodians, and (crypto) exchanges working together.”
At the moment, details about the lending features have not been released to the public. Therefore, cryptocurrency enthusiasts are unsure of the process to vet trustworthy borrowers. For example, some suggest that Binance should have “some sort of history to show how they [borrowers] have paid off debts in time in the past.”
Others took to Reddit to express their thoughts. One Redditor questioned:
“If they don’t pay, who should we use to go after them? Should we get a bunch of us together to form a group to lend lots of money out?”