Binance, the world's largest crypto exchange platform, has secured its first license in Southeast Asia through a collaboration with Gulf Energy, a leading power producer in Thailand. The collaboration is expected to begin in the fourth quarter of 2023. The arrival of Binance, a leading cryptocurrency, has the potential to transform the digital asset market in Thailand due to its high trading volume.
On May 26, the Securities and Exchange Commission of Thailand approved the partnership between Binance and Gulf Energy, which is the first license obtained by Binance in Southeast Asia. Gulf Innova, the fintech unit of Gulf Energy, will work with Binance in a 51-49 joint venture. Gulf Energy also owns 0.4% of Binance U.S., valued at $20 million.
Binance's presence in Thailand has the potential to change the outlook for the digital asset market in the region. Currently, Bitkub is the largest local exchange in Thailand with a 75.4% market share, followed by Zipmex, which is trying to maintain its position after experiencing a liquidity crisis following the collapse of Terra Luna in 2022. However, the overall trading volume saw a 79% drop during the crypto winter, which also impacted the failure of FTX.
The partnership between Gulf and Binance comes as Gulf looks to diversify its operations. Shares of Gulf Energy, Thailand's largest power producer, have been on the decline following a directive from the Move Forward Party, which won the May 14 election on a promise to reduce electricity bills for households by adjusting prices.
With this agreement, Binance and Gulf Energy Development will form a joint venture to establish a digital asset exchange and brokerage business. Further details of the digital asset business will be announced prior to its launch in the fourth quarter of 2023.
The partnership between Gulf and Binance is the seventh such partnership to be approved by financial regulators. Richard Teng, a representative of the joint venture, emphasized Binance's commitment to compliance and adherence to local regulations. Binance has adopted a compliance-first approach to reduce regulatory hurdles and avoid warnings previously received in countries such as the UK, several states in the US, and Japan. Teng also assures Thai users of a trusted, regulated and security-focused service.
Binance, the world's leading blockchain ecosystem and infrastructure provider for cryptocurrencies, is committed to empowering users' financial freedom by offering an unparalleled range of crypto products and services. These products and services include trading and finance, education, data and research, social goods, investment and incubation, decentralization, and infrastructure solutions. Now, the company is expanding its presence in Southeast Asia.