The globally successful crypto exchange & trading platform Binance secures another strategically important participation just a few business weeks after the takeover of CoinMarketCap
According to current industry reports, Binance has secured a majority stake in the Indonesian crypto exchange Tokocrypto.
According to a news release published today (12.05.2020), the investment is an important step for Binance to expand its portfolio through the regulated crypto platform in one of the largest and fastest growing markets in the world.
Binance has not yet commented on the news in detail, but according to "The Block" it is true that the Chinese group now holds a majority stake in the Indian exchange, which is not very well known globally.
Tokocrypto is a regulated crypto service provider that has apparently been experiencing steady growth in Indonesia for the past two years. The country's market is growing steadily as cryptocurrencies become more popular locally. But what Binance does make clear is the assessment of the Indonesian market. For Binance, the acquisition represents an opportunity to make its own crypto products available to more people as part of its expansion strategy in South East Asia.
In addition, Binance wants to use the cash injection to support the further technological development of Tokocrypto. This should enable the exchange to continue to grow locally and also promote education around the blockchain.
The Indonesian exchange started trading in 2018. Regulation and supervision are the responsibility of the Commodity Futures Trading Regulatory Agency as Indonesia's responsible regulatory authority for the young crypto market. Tokocrypto received positive coverage when a cooperation with QCP Capital from Singapore was announced.
The main problem with the Tokocrypto business was the persistently low trading volume, despite the fact that it had been licensed by the regulatory authority. On this point, the company is well behind the leading exchange of the country where the company is listed, Indodax, on the 24-hour chart. The latter exchange recorded trading volumes in excess of the $8 million mark in the past 24 hours. Binance's new " subsidiary" only reached a value of the equivalent of a mere 700,000 euros in the same period. The number of visitors to Indodax is also dramatically higher than the comparable figures for Tokocrypto.
A target group of potentially more than 270 million new customers was probably the decisive factor for Binance in making the new investment and the decision to enter Tokocrypto on a large scale.
In a Binance blog post, CEO Changpeng Zhao comments on the deal announcement, stating that the company's main objective is to accelerate the introduction of new technologies. In his opinion, Indonesia, as number 4 of the world's most populous countries, is a country with high economic growth and potential. The market is very attractive and could become a leading blockchain location.
The manager adds:
"Our tokocrypto investment allows us to discover new opportunities in the Indonesian market - alongside a local regulated partner with whom we can further expand the freedom of funds".
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