While cryptocurrency markets are weathering one of their deepest and longest lulls to date, the world’s largest crypto asset exchange, Binance, has set up shop in New Zealand. New Zealand is the most recent of Binance’s global registrations, which include France, Italy, and Spain, among others.

The company announced its successful registration as a financial service provider with the New Zealand Ministry of Business, Innovation and Employment (MBIE) in September and says the move signals a significant moment in the expansion of New Zealand’s burgeoning Web3 sector.

We asked Binance NZ Chief Executive Ben Rose to tell us more about what the company’s arrival in New Zealand means for our startups and fintech sector.

Who is Binance and why have they set up in New Zealand?

Binance is the world’s leading blockchain ecosystem and cryptocurrency infrastructure provider with a financial product suite that includes the largest digital asset exchange in terms of the daily trading volumes. It was founded back in 2017 by Changpeng Zhao, or CZ as he’s known, and has grown rapidly since then.

CZ mentioned at launch that New Zealand is often mistakenly overlooked by big tech companies, when actually Kiwis were the earliest adopter of digital transactions. New Zealand has a very good track record of fintech innovation as well. In terms of where currency and digital transactions are going in the future, Binance sees New Zealand as an ideal place to tap into that kind of innovative mindset and culture.

New Zealand is lucky to have forward-thinking regulatory authorities who are actively engaging in discussions about crypto regulations and the role digital currencies could play in New Zealand’s future. We see this as an exciting environment to be in, and look forward to sharing our experience from the many countries around the world where we have licenses and registrations, such as France, Italy, Dubai, Canada, Australia and of course now New Zealand!

This is a significant development and will give Kiwi cryptocurrency investors access to some of the lowest trading fees as well as access to lots of exciting new fintech services.

With the latest cryptocurrency crashes, investors worldwide have lost billions and many investors have lost their savings. What measures does Binance have in place to help safeguard investors new to cryptocurrency?

Just like with any asset class, markets do experience volatility, and the risk that comes with that is a normal part of investing. Despite the current bear market, Binance is still building and more and more people are coming into the ecosystem which is allowing more applications and use cases to be developed. The industry isn’t going away, despite pricing fluctuations.

One of our major focuses is on education, to help users understand the risks as well as the opportunities involved in cryptocurrencies. We’ve created a huge body of educational content in many languages which users can find by searching online for Binance Academy. As well as this, we have measures in place on our platform such as risk quizzes and questionnaires which ensure users are aware of the risks involved when engaging with certain products.

Furthermore, Binance established an emergency insurance fund called ‘SAFU’ Fund – Secure Asset Fund for Users to offer protection to Binance users and their funds in the event of a hack or other extreme circumstances. When the fund was first formed a number of years ago, we began allocating 10% of all trading fees in order to grow the SAFU fund to a sizeable level. Moving forward, we continue to monitor the size of the SAFU in order to ensure the fund size remains adequate to protect users’ interests. Users can view the SAFU wallets on wallet address 1 and wallet address 2.

Moves are afoot within the industry to make the mining of cryptocurrencies less energy intensive and reduce crypto’s carbon footprint. Can you tell us about some of these initiatives?

There is certainly a lot of activity in the fintech space around greening cryptos, that join up the public’s interest in Web3 with environmental concerns. Cryptocurrency networks and NFTs do use energy, but interestingly, a 2022 study found that Bitcoin is 56 times more energy efficient than the traditional banking system (Source: Khazzaka, Michel, Bitcoin: Cryptopayments Energy Efficiency, April 20, 2022.)

Having said that, there are lots of incredibly smart people coming up with innovative ways to incentivise climate friendly behaviour. An example was a major change known as ‘The Merge’ made to Ethereum, the second-largest crypto-asset network in the world, which cut around 99.9% of its energy consumption! (Source: Ethereum Merge Could Save 46 Million Metric Tons Of CO2 Emissions Per Year, Carbon Herald, 15 Sept 2022).

We’ve also seen things like carbon-neutral crypto asset funds and blockchain platforms for specific use cases from tracking cattle supply chains to preventing deforestation. (Source: World Economic Forum – Blockchain can protect our trees. Mar 9, 2021).

Binance as a global brand is dedicated to making the industry more sustainable. Binance Charity, the first-ever blockchain-enabled transparent donation platform, launched the world’s largest NFT tree planting project to plant 10 million trees worldwide. It is still an ongoing project and you can see the progress here.

What is Web3 and what role does cryptocurrency have in the development of Web3 initiatives? 

Web3 is the next generation of the internet that relies heavily on machine learning, artificial intelligence and blockchain technology to create open, connected, intelligent websites with an improved machine-based understanding of data.

Decentralisation is also a big part of web3 and the future of the internet won’t be controlled by a few big tech players, instead users will be in control of their online data.

That’s why cryptocurrencies and blockchain are vital to Web3 because blockchain will provide the technology for decentralisation, free digital identities with crypto wallets, and open digital economies.

Binance is actively investing in Web3 through Binance Labs, which funds the development of the most innovative and bold blockchain projects.

For founders out there wondering how to navigate the world of Web3, DAOs and cryptocurrency in relation to their startup ideas or initiatives, what are some of the key considerations you believe they should be thinking about?

We’re still in Web2 but we’re transitioning to Web3, which means a lot of consideration needs to go into how your Web3 startup concept will function while traditional finance is still dominant in the online space, and perhaps how they will move away from that model in a smooth way.

Also tech entrepreneurs ought to be trying to solve problems, and asking how decentralised technologies can work to improve people’s lives. That’s the whole point of technology.

CZ has estimated that Web3 will increase the size of the global economy by at least ten times in the next couple of decades, because it allows for more innovation than our current model. So there is a lot of opportunity there for the right ideas.

If you are a future founder looking for networking and acceleration opportunities, Binance Labs, the investment and accelerator arm of Binance, runs its incubation program regularly. If you apply for the program and get selected, there will be private sessions with industry leaders, including CZ and He Yi, to listen to their stories as founders.

Any final messages for the NZ crypto and fintech industry?

The New Zealand public has paved the way for the acceleration of change in financial services by being early adopters of these new technologies. There are likely to be a lot of benefits for the New Zealand economy as a result – the way we do things like fundraising, financing, commerce and investments could all change in a fundamental way.

The opportunities for totally new business models to be developed are in front of us now.

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