Media: Binance to give up part of its fee income to attract users

Due to the introduction of free trading in some pairs with the BUSD stablecoin, the capitalization of the asset has grown by $19 billion in two months

01.09.2022 - 09:45

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What’s new? Financial Times writes that the largest cryptocurrency exchange by trading volume, Binance, is giving up fee income in order to attract new customers. Recently, the company announced the temporary cancellation of fees for trading in the pair of ETH with the platform’s native stablecoin, BUSD. And since July 8, the platform introduced zero fees on bitcoin spot trading in 13 currency pairs, including with BUSD. According to CryptoCompare, BUSD’s market capitalization rose by 8% to $19 billion over the next eight weeks.

Material by Financial Times

Stablecoins are popular among traders because they are tied to a fiat currency, usually the dollar, and they are easy to use to lock in profits between trades.

What else does the FT piece say? Binance CEO Changpeng Zhao told FT in March 2022 that about 90% of the company’s total revenues come from trading fees, which fluctuate depending on the price of bitcoin and other cryptocurrencies.

Sipho Arntzen, an analyst at Swiss bank Julius Baer, said that Binance’s elimination of trading fees may represent “somewhat of a ‘market grab’ strategy”.

“This approach [to free trading] has also been seen in traditional finance in the past, where a well-capitalized newcomer seeks dominance with the enticement of commission free trading for a limited period,” noted Rufus Round, chief executive of GlobalBlock Digital Asset Trading.

Experts also note that Binance has an opponent in the form of the FTX exchange, which attracts its customers through sponsorship deals and high-profile investments in the crypto sector.

Earlier, it was reported that both crypto exchanges were going to participate in an auction to buy out the assets of the bankrupt crypto broker Voyager Digital. The auction itself will be held on September 6, if no winner is revealed, a second round will be held on September 29.

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