In a recent interview with Cointelegraph, Binance CEO Changpeng Zhao, aka CZ, has lent his expertise on how to set up a global cryptocurrency exchange and outlined four key criteria to follow in order to ensure success.
‘Global mindset’ is a must
CZ stressed that having a “global mindset” is a must, as cryptocurrency exchanges who claim to be “global” often tend to focus on just one particular region, thereby greatly limiting their international presence.
“First, I’d say you need a global mindset. Many crypto exchanges claim they are a global exchange, but if you look at them closely, they are focused in one region, usually where the majority of their team is. Their products are only available in one or two languages, their customer service is only available in one or two languages, and they only organize offline events in their own region. As a result, most of their users are from that region, too.”
Achieving “a true global mindset” is a difficult task in itself, CZ continued:
“If the founder(s) have not lived and worked in multiple places in the world, it’s very hard for them to have a global view. If you have a global mindset, the rest are execution. Execution is also super hard.”
Four steps to success
Additionally, Zhao laid out four key elements for crypto businesses to focus on in striving to become global.
The first is having a sustainable business model. “Business owners need to evaluate whether they have a successful business model with a clear profitability path before growing its size rapidly or blitzscaling to the globe,” CZ clarified.
The other major factor is knowing audiences’ preferences, which can vary greatly depending on the region, and the ability to tailor services in accordance:
“When a company is serving multiple markets, it has to make sure the product offering is tailored to the local markets and keep on providing value or incentives for users to stay with the business. It’s the same for crypto exchange. We should adapt to changes quickly, keep on building and bringing forward innovative products to suit the various and increased demands of local markets.”
Being in touch with the regulators and acknowledging the responsibility before the customers are also key, according to CZ.
“A global crypto exchange should work closely with local governments or regulatory agencies so that the local users can trade on the platform without concerns. A centralized exchange provides custodial services to a large amount of funds and hosts the personal data of users, so it should continue to optimize its tech and security systems to keep user funds and data safe.”
Finally, CZ noted that the cryptocurrency exchange industry is still in its infancy, especially when compared to traditional financial markets. “There is roughly one crypto user out of 1,000 people,” he observed, adding that the adoption rate is still very low.
Thereby, according to CZ, leading industry players “should take the responsibility of building the industry, raising the industry standards, driving massive adoption of cryptocurrencies and growing the crypto industry on the whole”.
CZ elaborated that it’s not a universal blueprint for crypto exchanges aiming for global presence, as new challenges tend to arise when the business grows larger. In his view, the ability “to constantly adapt to changes, put users first and ensure profitability” will help businesses to flourish in the long term.
Binance’s worldwide presence
Binance has established itself as the world’s largest cryptocurrency exchange by trade volume, although some competitors would find that debatable.
Originally founded in China prior to the 2017 blanket ban on crypto, Binance promptly moved overseas and is currently headquartered in the Cayman Islands and Seychelles.
Its team operates in over 40 countries and develops products available in more than 20 languages, which makes it one of the most global businesses in the industry. It claims to serve over 15 million customers.
In May, CZ described the African continent as an untapped environment for exchanges.