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Cryptocurrency exchange Binance announced today that it is launching a new P2P trading platform. The exchange announced the launch on Twitter today.
Trading available in Chinese Yuan
According to a separate announcement made on the company website, the new P2P trading platform will allow users to trade the Chinese Yuan against Bitcoin, Ethereum and Tether. The platform will initially only be available to Android app users who have a Binance account older than 30 days. The service will be available to iOS and web users at a later date. However, it did not give a tentative date at which the service will be available.
Binance has recently tried to expand its global footprint and diversify its product offering. It came up with Binance Launchpad, its IEO service, a lending service, and even a staking service. It has also tried to create a US-based subsidiary to gain more access to the American market. Interestingly, the exchange has also added Koinal support on its platform, which will help it in buying digital coins straight via credit cards.
What is P2P trading?
Peer-to-Peer (P2P) trading effectively removes the role of the crypto exchange as an order book manager. Instead, buyers and sellers get to interact with each other on a single platform directly. In this case, the exchange can work as a platform where the two parties meet and may provide reliable third-party escrow service to ensure that the transaction goes on smoothly. Buyers and sellers have to advertise their intent to purchase a cryptocurrency for a certain amount and meet with a second party to decide the terms of the deal. They may even transfer the coins physically in a predefined location. It also removes the need for paying a trading fee to the exchange as well.
With the help of a new P2P exchange, Binance will be able to attract a larger number of users to its platform, which will be helpful in expanding its global userbase. The platform could even serve as a gateway to other Binance services on the platform. Moreover, a P2P exchange is a far more decentralized option for trading digital currencies as compared to a regular exchange. Note that a recent report suggested that about $10 billion of Bitcoin’s value, representing 7% of its total supply, is held by eight digital currency exchange. This creates issues with centralization that a P2P exchange could help mitigate.