Binance is making a bet on the potential of the Indonesian crypto market, making an undisclosed investment into the Jakarta-based and regulated exchange, Tokocrypto.
Binance, the crypto trading leviathan that doesn't like to reveal where it's based, announced Tuesday morning the funding would go toward growing Tokocrypto's business, such as building out new offerings and products, improving the tech stack, as well as expanding its customer base.
Launching in 2018, Tokocrypto became the first exchange to be regulated by Indonesia's Commodity Futures Trading Regulatory Agency (BAPPEBTI) in 2019.
Indonesia is quite strict when it comes to digital assets. Crypto is effectively outlawed as a means of payment and new regulations passed earlier this year require investors to put up high minimum capital in order to trade crypto derivatives.
But within the cracks where the government allows it to exist, cryptocurrency trading appears to be flourishing in the world's fourth most populous country. Although there is no independent data showing just how big the local crypto market is, industry sources speaking to Reuters in February put it at possibly the same size as the country's stock market.
"Indonesia will become one of the leading centers of the blockchain ecosystem in Southeast Asia. Our investment in Tokocrypto will allow us to explore exciting new opportunities together for the Indonesian market with a regulated local partner to further enable the freedom of money," said Binance's founder and CEO, Changpeng "CZ" Zhao.
Rival Huobi was the first major exchange to make a move in Indonesia when it launched a local entity there back in 2018. Binance arrived more recently, adding the local rupiah currency to its peer-to-peer platform back in April.
Binance has opted for a different strategy in Indonesia. Investing in a regulated exchange gives Binance the best of both worlds: exposure to the promising Indonesian crypto scene, without battling through the regulatory hurdles it would face if it went for a full-blown presence in the country.