Huobi Launches USD Gateway Platform To Enter Western Markets
The Huobi Group is now focusing on the Western market and it wants to be friendly with Wall Street. Huobi, which was founded six years ago, grew mostly due to the Chinese and Asian market, but it looks like now is the time for the expansion that the company has already needed for quite some time.
Now, HBUS, which is a sister exchange of Huobi that was founded by its CEO, is leveraging its global network in order to start a partnership with Prime Trust, a trust company based in the state of Nevada, which will be able to provide services of withdrawal and deposits for the users.
Finally, Huobi will let western traders use USD to crypto trading for Bitcoin and Ethereum, as well as Tether USD. However, you need to use a minimum of $100 USD.
The CEO of Prime Trust, Frank Fu, has affirmed that this will be a very exciting launch and that the partnership will be very important which will be important in order to establish profitable partnerships with institutional clients and to create a compliance infrastructure that really works. Also, he is excited to be able to offer some products such as derivates and even ETFs with time.
With this partnership, the main idea is to expand the services of Huobi, which includes launching some other tokens and services with time. The Chief Compliance Officer of the US version of HBUS, Megan Monroe-Coleman, has affirmed to the media that the company has devised a very thorough process for reviewing new projects and that the company is excited to increase the number of assets presented for the clients.
According to her, the compliance process is very important in order to avoid listing tokens that can be considered securities by the U. S. Securities and Exchange Commission (SEC), as this kind of token has way more limitations in how it can be sold in the country.
The main idea of this new product is to be a gateway to connect the West and the East. U. S. financial products are very well regarded in the Eastern world, but sometimes they are not accessible, so this is the problem that the exchange is trying to solve now.
The Greatest Compliance Challenges
Huobi’s main challenge is to create a compliant system that will let its Chinese customers invest in the U. S. market. China has a very strict compliance system, so most of the Chinese clients of the company are based outside of the country to escape these laws.
With this new system, Chinese traders could convert yuan for cryptos using the over the counter (OTC) desks of the company and then send the cryptos to the exchange to cash out in USD.
China forbids its citizens for moving around more than $50,000 USD per person without any kind of special permission, this way, this could be a good solution for institutional investors who do not want to ask permission to the government.
However, the whole thing could be seen as illegal or as money laundry easily, so Huobi needs to have a tight strategy in order to actually pull it off without angering the Chinese authorities. In order to achieve this, the company has to be as compliant as it can, which led Huobi to hire more employees for this area.
What the company is trying to create in the United States is a very complex system that will need the help of several banks in order to work, as they will help the company to operate and to make this audacious move.
Plans For The Future
There are not all of Huobi’s plans for 2019. The company is also set on releasing its own stablecoin into the world. The company currently supports most of the high-profile stablecoins in the market, but it wants to create its own.
Despite some layoffs which happened in December 2018, the strategy of the company is clear: to grow and to expand in the Western markets. Huobi is currently the 17th largest crypto exchange in the market, so it clearly has a lot of space for growth.
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