New U.K. Bitcoin Exchange Overwhelmed By 'Crazy' Demand Amid Brexit Uncertainty

Billy Bambrough

Bitcoin has had a rocky start to 2019, though cryptocurrency developments are still rolling on with many hoping the year-long bitcoin bear marketlabeled crypto winter for its debilitating effect on the industrywill soon thaw

Now, Hong Kong-based Binance, the world's largest bitcoin and cryptocurrency exchange by trading volume, has said it's been "overwhelmed" by registrations for its new Jersey-based trading platform, which the exchange's widely respected chief executive Changpeng Zhao, often known as CZ, put down to "crazy" demand. 

Meanwhile, the U.K. is stuck in Brexit gridlock as it struggles to find a path out of the European Union following its decision to quit the trading bloc over two years ago, playing havoc with local financial markets and casting doubt over the country's future as a traditional banking hub.
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The Jersey-based Binance trading platform is expected to bring a fresh wave of competition for the likes of the Coinbase and Bitstamp exchanges, both of which serve the local market.GETTY


Binance Jersey, which opened for registrations on Tuesday this week, will allow users to trade euros and British pounds with bitcoin and ethereum and access digital asset management services.

" is overwhelmed with registrations," CZ said via Twitter earlier today. "There is a backlog of KYC (Know Your Customer) verifications already. More resources are allocated to reduce it. In the meantime, we appreciate your understanding and patience. Just crazy! One thing we do 'well' is underestimating ourselves, and the market."

Binance has said it expects the island of Jersey, which is a self-governing dependency of the U.K., to be a major driving force of increasing cryptocurrency use in the European market, with Brexit part of its reasoning for expanding into the region.

"Expanding the cryptocurrency exchange markets with fiat currencies in the European region is opening new economic opportunities for Europeans as well as freedom from looming Brexit uncertainty where the pound and euro are also in concern,” said Binance chief financial officer Wei Zhou. "Through Binance Jersey, we want to help bridge the crypto-fiat channel for Europe and the U.K. as part of our global expansion to support broader cryptocurrency adoption."

Cryptocurrency take-up in Europe has so far been sluggish compared to U.S. and East Asian markets, however, with daily bitcoin exchange volume on the continent less than 4% of the global volume late last year, according to CryptoCompare, a data provider.
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Zhao Changpeng (CZ), chief executive of Binance, regularly speaks to users of his exchange via Twitter.© 2018 BLOOMBERG FINANCE LP

Over the last two years, the U.K.'s financial sector has repeatedly warned it could be wiped out if the country leaves the E.U. without a trading deal in place—a situation that's become known as a hard Brexit. 

Earlier this week the head of industry body U.K. Finance, which represents banks and financial services, warned crashing out of the E.U. without a deal would be a "catastrophe" for the country's banking industry, which rivals New York's as the world's biggest financial hub.

Elsewhere, a disorderly Brexit would plunge the U.K. into recession for at least two years and lop a half percentage point off the entire E.U.'s economic output, according to Deutsche Bank chief executive Christian Sewing.

The governor of the Bank of England, Mark Carney, warned in November last year the pound could fall by a quarter in the event of a no deal Brexit.

British prime minister Theresa May is now battling to find a cross-party compromise to the Brexit standoff after the deal she stuck last year with the E.U. was rebuffed by lawmakers, including many of those in her own party.

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The bitcoin price is still nursing a hangover after its epic 2017 bull run.COINDESK

While interest in bitcoin, cryptocurrency, and alternatives to the traditional financial industry remain strong in the U.K. and Europe, that interest has done little to support the bitcoin price.

Bitcoin remains trapped in a bear market that has wiped billions from its market value and seen the price per bitcoin fall to around $3,500 from almost $20,000 a little over a year ago.

"During the bull market in 2017 we definitely saw a strong interest in bitcoin from UK clients following the Brexi referendum. However, now that price direction is a bit more uncertain, it's more difficult to identify such national trends," said Mati Greenspan, senior market analyst at broker eToro.

You can follow me on Twitter @billybambrough and read my other Forbes posts here

Disclosure: I occasionally hold some small amount of bitcoin and other cryptocurrencies


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