Saying goodbye to the "Kimchi Premium," how will Bithumb play its global expansion strategy?

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Saying goodbye to the "Kimchi Premium," how will Bithumb play its global expansion strategy?

As digital currencies circulate globally, the "kimchi premium" is gradually narrowing, and Korean exchanges have also begun their journey towards globalization.

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In the second half of 2017, during the bull market of digital currencies, the Korean cryptocurrency market was also booming. Investors, especially millennials, were enthusiastic, leading to a situation where the Korean won's digital currency market price was much higher than the global average, resulting in a "Kimchi premium." At that time, the Korean won became the fourth largest currency for Bitcoin trading after the US dollar, Chinese yuan, and Japanese yen, and even became the world's largest Ethereum trading market. Major Korean exchanges like Bithumb became globally renowned "brick-moving sites," attracting investors from all over the world for arbitrage trading.
On November 6th, the conference hall of the Seoul Palace Hotel was crowded as the Korean exchange Bithumb officially announced the launch of Bithumb Family ecosystem, consisting of 9 members including the Korean site, international site, Singapore site, public chain, custody, blockchain ecosystem, STO, OTC, and DEX. Bithumb CEO Choi Zaiyuan stated that Bithumb Family, led by Bithumb and supported by Bithumb Chain technology, aims to build a blockchain value network.
This was followed by Javier, the Co-founder and Managing Director of Bithumb Global, revealing some key figures in an interview with PANews: "75.7% of the Korean market share," "over 8 million trading users," and "daily trading volume exceeding 3 billion RMB," which form the cornerstone of Bithumb's global expansion strategy.
o1 Establishing Bithumb Family, Exchange Business Takes the Lead
Despite expanding and developing the entire blockchain industry, when discussing the current "leading advantages" of Bithumb Family, Javier told PANews that the more mature aspect within Bithumb Family remains the exchange business. Not only is the Korean site Bithumb steadily progressing, but Bithumb Global, established in May this year, is also growing rapidly. With the support of 8 million users and a more open and user-friendly approach to projects and users, Bithumb Global reached a daily trading volume of 1.5 billion RMB within just 2 months.
The strength of the exchange also benefits other members within its ecosystem.
Javier believes that the massive user base can bring tremendous value to projects within the Bithumb Family ecosystem. The future interoperability between sub-exchanges in different regions globally, and the support from various basic business layers within the ecosystem, such as trust, wallets, will empower the projects participating in Bithumb Family. More importantly, this empowerment can transfer value, enhancing liquidity for projects.
In addition to closely connecting the exchange business with projects, Bithumb Family is also actively obtaining compliance licenses. Javier mentioned that the company is actively seeking compliance licenses in countries such as the UK, Japan, Switzerland, Liechtenstein, and Thailand, with the most progress being made in Liechtenstein. Licenses have already been obtained in Canada and the Philippines, with plans for further operations after proper planning.
o2 Trust, Financial Derivatives, and the STO Triangle
"Many commercial institutions around the world are looking to enter the cryptocurrency space, but they face many barriers such as holding a compliance license and asset custody location," Javier explained. He stated that what Bithumb Family is doing is lowering barriers and increasing compliance.
As part of Bithumb Family, there is Invault, a licensed virtual asset custody platform in the Asia-Pacific region. Javier revealed that Invault's current asset custody scale has exceeded 100 million USD.
During the event, Invault introduced fiat custody and real-time exchange functions for mainstream stablecoins, supporting compliance fiat deposits and withdrawals for users in over 200 countries. It also allows users to convert seven mainstream USD stablecoins like USDT, PAX, HUSD, and USDC into fiat currency compliantly. The fiat business currently covers countries and regions such as China, Korea, Vietnam, Malaysia, Singapore, and the United States.
The Founder and CEO of Invault, Kenneth XU, also mentioned to PANews that they are in talks with multiple leading exchanges globally, and Bithumb Global is expected to be the first exchange to launch fiat custody services.
o3 Why Focus on Custody Business?
"It's not just about compliance," Javier said. Asset custody business can lead to the creation of more financial products. Bithumb Exchange plans to incorporate these financial derivatives into its trading categories in the next stage of development.
Javier explained that Asian users have the highest proportion of foreign exchange trading in Korea, indicating a huge market for digital currency derivatives. Leveraging the characteristics of this local market, Bithumb is well-positioned to dominate in the development of derivative business.
While the digital currency derivative market mainly consists of futures contracts and leverage, Bithumb aims to go beyond these conventional offerings.
"There are over two thousand derivatives globally, and Bithumb is actively researching which ones are more suitable for the cryptocurrency ecosystem," Javier further revealed about the progress in the derivative direction, mentioning that they are putting significant effort into options. Once the timing is right, they will introduce their own options products.
Although institutions like CME and BAKKT have announced the launch of Bitcoin options products, Javier pointed out that this is a different market. The entry costs for CME and BAKKT are very high, with the account registration and review process taking at least a week, making it unfriendly for retail investors. Bithumb hopes to directly integrate options products with its exchange business, allowing users to participate by holding coins.
Notably, Security Token Offerings (STOs) are also a crucial part of Bithumb's strategy. STO refers to the process of compliantly issuing tokens backed by physical assets in countries where it is legally permitted. Javier stated that they closely monitor policy regulations globally and will promptly follow up on any policy updates.
If the internet is an information network that solves the problem of information transmission, then blockchain systems based on technologies like ledger replication and cryptography, due to their relatively higher costs in storage, networking, and computation compared to the internet, address the issue of value transfer. The network established through blockchain should be referred to as a "value network." Bithumb Family's important member, Bithumb Chain, was born with the initial intention of value transmission.
At the event, Bithumb CEO Choi Zaiyuan revealed, "Bithumb Chain will help Bithumb Family extend the upstream and downstream of its trading business, serving as a robust complement to existing products, services, and infrastructure."
Javier further explained that Bithumb Chain, as the foundational infrastructure of the ecosystem, aims to enhance operational efficiency, facilitate the flow of value, information, and commerce within the ecosystem, reduce collaboration costs, and contribute to the development, expansion, and collaboration of the entire ecosystem. It complements the existing ecosystem in terms of security, scalability, and extensibility, serving all developers and users within the ecosystem.
If the ecosystem members of Bithumb Family are likened to flesh and blood, then Bithumb Chain is the skeleton within that flesh and blood.
Bithumb Chain will introduce a new decentralized trading protocol named PSP (Profit Sharing Protocol). Specifically, PSP is a decentralized trading protocol that uses the "On-chain Settlement, Off-Chain Relay" technical approach. Users can accept the PSP trading protocol content and set relevant parameters in the related pages, such as fee standards, fee accounts, supported trading pairs, to easily deploy their own trading application.
Javier also mentioned that they will provide an innovative Exchange-as-a-Service (EaaS) service based on the PSP protocol. EaaS, short for Exchange-as-a-Service, is a service system built on the PSP trading protocol. EaaS allows users to build their trading applications with minimal steps, low costs, and high efficiency. The vision is to increase the liquidity and depth of asset transactions within the ecosystem through EaaS.
"Broadly speaking, EaaS can be applied to all application scenarios that require trading. Users can easily deploy their trading applications with simple steps," Javier stated. With robust technical support, Bithumb Chain can provide users with a unified service that combines the smooth trading experience of centralized exchanges, high-speed order matching, and the secure transparency of decentralized exchanges.
o4 Lowering Entry Barriers, Breaking the "Dimensional Wall"
The goal of Bithumb Chain is to significantly reduce the entry barriers to blockchain networks by accumulating blockchain knowledge and breaking the barriers between circles to attract more "fresh blood."
When discussing the development of Bithumb Chain, Javier emphasized that Bithumb Family clearly understands the importance of developers because they are the "ecosystem creators" who can generate more end-users and maintain ecosystem prosperity.
To attract more developers to co-build the ecosystem on Bithumb Chain, they have developed numerous application expansion interfaces technically, allowing developers to conduct application development through a series of basic contracts. Besides, they have established a complete mechanism from early application incubation to later investor exit in the industry chain, enabling these value creators to focus more on project development and unleash their creativity.
In addition, as part of its market strategy, Bithumb Chain is not sparing any effort in incentivizing ecosystem participants. They not only offer regular incentives but also have special incentive programs for different ecosystem participants at different time points.
Speaking of China's favorable blockchain policies, which support and encourage the industry's development, Javier acknowledged that "China's strong support will have a tremendous impact on the entire industry, attracting a large amount of resources and capital into the industry." The influx of these resources will undoubtedly further solidify the industry's foundation, and the increased influx of outstanding talent will elevate the overall industry standards.
As a pioneer and deep-rooted player in the industry, Bithumb has a profound understanding of blockchain. The mutual empowerment among Family members is bound to inject new vitality into Bithumb, ushering in a new chapter.
The original article is from our partner PANews

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