Binance has officially announced that its U.S. exchange will start accepting registrations and deposits from September 18, 2019. The exchange has been trying to launch an American arm for quite some time; most exchanges operating outside of the United States have geoblocked the region due to a burdensome regulatory process, September 12, 2019.
Binance to Compete for U.S. Market Share
Coinbase’s monopoly over the exchange business in the United States is being challenged by Binance. Globally, exchanges compete with each other as most of them operate in Europe, Asia, Australia, and Africa.
In the United States, Coinbase has enjoyed a lion’s share of market concentration, with little competition from Bitfinex, Poloniex, and others.
Binance will launch registrations for American customers and accept deposits for BTC, ETH, BCH, LTC, XRP, and USDT.
Trading will not commence on the platform until a later date which is yet to be confirmed by the exchange. Binance will also list new assets based on their internal digital asset risk assessment framework.
Given the way Poloniex pulled liquidity for certain tokens in the United States due to regulatory issues, it can be ascertained that Binance U.S. will not have as many listed assets as the international Binance platform.
It goes without saying that there are different tiers of verification that unlock the ability to withdraw higher amounts, but this is subject to the level of KYC you provide the exchange with.
KYC has been one of the biggest problems crypto enthusiasts have with services, as you allow a centralized entity to hold valuable personal data. Unfortunately, in order to stay compliant with regulation and implement anti-money laundering (AML), KYC is a necessity.
Capturing Market Share and Monopolization
Binance U.S. is most likely going to steal some market share from Coinbase and the other smaller player operating in the region.
There is a risk of sector concentration and a monopoly being formed on a global level if Binance and Coinbase continue to scale at the same rate.
Since Bitcoin, Ethereum, and many other networks are free markets, there is technically no problem with having industry power concentrated with a few players.
However, governments across the globe are unlikely to allow this to persist. The cryptocurrency industry is relatively miniscule today, so they won’t be bothered. Depending on how fast the industry grows and how big it gets, we can expect a lot of antitrust litigation to go down in the space.