The service will enable Chinese users to trade Bitcoin, Ethereum and Tether against the Chinese Yuan.
Its launch unlocks an opportunity for the Malta-based exchange to tap the immense popularity of P2P trading in China.
Since September 2017, the Chinese authorities have effectively banned cryptocurrency exchanges or trading platforms. It’s meant that P2P and over-the-counter (OTC) trading has become a critical on-ramp for China’s crypto traders.
A P2P trade allows sellers and buyers to transact directly with each other without a third party to process trades, and thus falls outside the ban—as long as trades remain on a small scale.
In China, OTC services are often offered by locally managed WeChat groups, and even a small operation can expect to process $300k a day on average. To address counterparty risk, such services are only available to group members with a good, longstanding track record.
In a bid to access the immense Chinese market, Huobi and OKEx, two of the other major Chinese exchanges that relocated from China after the clampdown, have continued to conspicuously serve Chinese customers from abroad, behind a peer-to-peer OTC front.
Binance’s P2P service places the activity in the open, as well as extending the range of products and services the exchange is able to offer. In September, it began testing two crypto-futures trading platforms, a dollar-based stablecoin and rolled out a service for US customers.
In order to use the P2P service, an account must have been in operation for at least 30 days, according to the announcement. And it’s currently only available on the Binance Android app, although an iOS and desktop version will be rolled out soon.
The company’s CEO Changpeng Zhao has also signalled that P2P platforms for other countries subject to crypto trading regulations will follow.
Last night, @Binance Launches P2P Trading, starting with China. Most of CT probably can't use it yet, but 1.4 billion people can. We will expand the service to other regions soon.
— CZ Binance 🔶🔶🔶 (@cz_binance) October 9, 2019
Last month, the exchange was part of a $200 million funding round for Beijing-based crypto news site Mars Finance.
Also in September, Binance’s co-founder and chief marketing officer He Yi said that the new P2P service is part of a plan to dedicate more time and resources to compete in the Chinese market.