Huobi also plans to open a fiat gateway for the exchange in October, enabling people to buy cryptocurrencies via credit cards, wire transfers and other commonly used payment methods in Argentina, including Mercadopago.
Crypto exchange Huobi is expanding to Argentina as cryptocurrencies gain acceptance in the region as a hedge against the infamous inflationary peso.
The company said in an announcement on Tuesday it has launched Huobi Argentina, a local exchange that will facilitate purchases of a range of cryptocurrencies with the Argentine peso.
The exchange said the demand for cryptocurrency in Argentina is driven by the country’s openness to the nascent technology and the need to find an alternative to mitigate the risks caused by the peso devaluation.
Argentina ranks fourth in terms of the percentage of cryptocurrency adoption worldwide with 16 percent, according to a report by market data provider Statista. The report notes that Latin America has more crypto users than any other region percentage-wise.
“Argentina’s volatile economic situation, including the country’s newly imposed currency controls and rampant inflation, creates a flourishing environment for cryptocurrency adoption,” the exchange said.
Argentina recently imposed currency controls to stabilize the peso markets, restricting residents from purchasing foreign currencies.
“The increasing demand for crypto-related products and services makes Argentina a perfect entry point for Huobi to pursue larger projects in promoting cryptocurrency and blockchain to the market,” David Chen, senior business director at Huobi Cloud, said in the statement.
Huobi Cloud to Offer White-Label Exchange Services in Middle East, Africa
Huobi Cloud, part of the crypto exchange Huobi Group, has announced its plan to provide more local financial institutions with white-label exchange services based on cloud technology in the Middle East and Africa.
Existing institutions include the Nigeria-based SaBi exchange, with about $100,000 worth of daily crypto trading volume, and the South African exchange HIZA, which is expected to go live in the fourth quarter.
Mohit Davar, EMEA regional president of Huobi Group, described to CoinDesk how these institutions are looking to leverage an international platform’s security resources and deeper liquidity, otherwise difficult to recreate on their own.
Huobi Cloud has been talking with potential partner companies across 10 countries in the Middle East and Africa, hoping to launch two or three of them this year, according to Davar.
“We cannot go and market our product in a localized manner in over 200 countries. There are certain markets where it is better to partner with somebody,” Davar said.
The push comes as part of the Huobi’s expansion in the Middle East and Africa, following its fiat-crypto gateway launch in Turkey this month. Through the cloud service, Huobi is spreading its wings to enable a wider range of institutions besides its existing partners to trade cryptocurrencies, the company said.
The cloud service will offer core functionalities of the global exchange, ranging from cryptocurrency trading to the security system that guards such transactions.
According to Davar, the firm is looking for more institutionalized clients with a large user base of their own existing services. Huobi is targeting institutions such as credit unions, banks or fintech companies with a large group of customers who’d want to trade digital assets.
Davar said Huobi offers exchange services via its API, which could be used for localized exchanges, or a white-labeled cloud service, which is much simpler than launching a fully-localized exchange .
The cloud service brings a stream of new profits, rather than eating into their local market shares, due to a revenue-sharing fee structure. Clients would pay an upfront fee in the range of hundreds of thousands dollars plus 50% of their revenue from transaction fees on the platform, Davar said.
In May, Huobi Group’s senior business director David Chen told CoinDesk that the unit had earned $1.5 million in net profit from cloud partnerships gone live between Oct 2018 and May 2019.
Chen said, at the time, there were 150 platforms under the Huobi Cloud umbrella, plus 80 partnership deals in the pipeline.