Economic crisis a 'bittersweet' boom for Binance.US, says CEO

While the impact of March’s coronavirus-induced market crash was felt in industries around the globe, the cryptocurrency sector has rebounded with remarkable speed.

Bitcoin has quickly recovered from its own crash, with its price briefly touching $10,000 in advance of its block reward halving. Exchanges are reporting significantly increased volumes, while social media activity around Bitcoin is reaching levels not seen since 2018.

“I won't say that that's a triumph of cryptocurrency that when the world is caving, we're able to sustain business,” Binance.US CEO Catherine Coley told Decrypt. “But there is something to be said about the sustainability of something that is 24/7, digital, and global."

The March crash was, Coley said, a huge day for market participants. “You were seeing people having to make strategic decisions on their positions, having to either close them or buy dips, or just pay attention and take action on it,” she said. “We actually saw the largest trading volume on our exchange, year-to-date, on that day—which is bittersweet.”

How Binance.US is coping under quarantine

Binance.US and others around the crypto industry began to see increased rumblings about the pandemic around the time of Chinese New Year in late January, Coley said. That led to an uptick in cryptocurrency activity in February as more and more people throughout Asia were quarantined at home.

“It was kind of an interesting thing, drawing a little bit more attention towards crypto prices, especially Bitcoin—and then we saw this penultimate day taking place where the news relatively hit home,” she said. “And that's kind of where you saw on March 12-13, this caving of the price of Bitcoin and all assets in the same flow."

For Binance.US, having its team work remotely from home was no startling shift—they work in a digital industry with digital counterparts and vendors, so it’s largely business as usual. As we’ve seen with the surge in gold demand recently, for example, and the struggle for physical supply to keep up with that demand due to COVID-19 limitations, the crypto industry has had it easier than most.

“Where there were supply chain squeezes that we were seeing from other industries, digital assets seemed to be almost immune,” said Coley. Indeed, the fact that the market crash and lockdown coincided with the imminent Bitcoin halving seems to have driven interest in crypto to new heights; in the first part of our interview with Coley, she explained how the halving could drive a longer-term rally.

Crypto education and adoption

Although much of the renewed interest in crypto is driven by people already immersed in the space, Coley believes that the market turmoil and the lockdown has helped introduce newcomers to the concepts of Bitcoin and crypto assets, too.

“You're getting some real mainstream airtime for the prices of Bitcoin and prices of other asset classes, which I think is mostly bringing the attention to us all that there are significant effects of global, macroeconomic situations taking place on these capital markets,” she said. “You're kind of going: ‘Okay, this is an unusual but amazing series of events, where people are becoming somewhat more financially literate, but also somewhat more crypto-literate’. That’s a very positive omen for us that are already in the industry, hoping to build it out in a way that caters to those that maybe are unaware of how crypto or Bitcoin works right now."

In March, Binance.US launched “Your Guide to Crypto Literacy,” an expanding series of articles that break down crypto concepts and functionality in simple, easy-to-understand ways. With dedicated primers on things like “digital dollars,” decentralized finance (DeFi), and consensus algorithms, it’s a friendly approach to educating a potentially large and confused new audience.

The exchange is certainly not the first to try to break down these sometimes complicated subjects—Decrypt has its own Learn series, for instance—but the timing and the concerted initiative show that Binance.US sees an opportunity to help try to onboard people who may be seriously exploring Bitcoin and crypto for the first time in their lives.

"It has been a devastating event for the world to go through this,” said Coley, who added that the quarantine has highlighted the fact that crypto is “a digital element that involves no commuting to work, no difficulty in access.” It’s capturing more eyeballs than ever before, she added. “Via social media and mainstream media... via everything but print media because nobody's picking up the newspapers."

Digital dollars for coronavirus relief

With governments around the world launching unprecedented stimulus programs, Coley believes that the moment is ripe for digital currencies; in a recent opinion piece for CoinDesk, she argued that stablecoins could be an ideal solution for distributing coronavirus relief payments to United States citizens, given reports that some people could be waiting several weeks or even months for a check.

Ultimately, there was a proposed bill in Congress regarding “digital dollars,” but nothing has come of it yet. While it’s a reasonable idea, Coley’s not surprised that the US government has yet to embrace the idea. 

"Stablecoins were invented like last year,” she said. “That would be 1/60th of the average congressional-person's life something has existed. When you think about it in that context, I am very aware that we are nouveau. I am very aware that we are not saturated in terms of adoption, and hence there's no better time than now to chirp up and talk about it, and raise to the table: Why didn't we look at this, or why haven't we thought about it if it exists?”

Those responsible for distributing something as large-scale as government funds don’t have the luxury of being able to trust “something that they have not vetted for 25 years or more,” she added. “It's a little bit of the push and rebellion that is of the digital assets mindset. Let's take a leap of faith; people are dying right now. You don't necessarily need to be going through the same system if the same system is what got us into this mess in the first place.”

Still, even if that kind of idea is too ambitious in the short term, Coley said that the uptick in interest and adoption around crypto and digital assets in the last couple of months is undeniable. The last major financial meltdown birthed Bitcoin; perhaps this one will help Bitcoin and other crypto assets reach a much wider swathe of people.

She pointed to Square and its Cash App being able to accept coronavirus stimulus payments, and the company being picked (alongside PayPal and Intuit) to provide government-funded small business loans in the wake of COVID-19, as a sign that things are changing.

“We saw folks like Square and Cash App open up a way for allowing folks that did not file taxes last year to still be able to receive those payments—in a way that isn't using the existing rails, but is something that is nouveau,” said Coley. “It's brought about a great amount of adoption beyond what we had at the start of January."