The most successful cryptocurrency exchanges are more than just token barterers.
The Huobi cryptocurrency exchange is increasingly becoming a more holistic and general blockchain organisation through a partnership with the Nervos public blockchain protocol. The goal is for Huobi to diversify away from being an exchange alone and to move more towards being a big name in the emerging decentralised finance (DeFi) space.
“The mission of Huobi Group is to make finance more efficient and make wealth accessible to all,” said Huobi Group CEO and founder Leon Li. “This project is not only in line with Huobi’s overall strategy, but it also fulfils our core mission. From a strategic point of view, decentralised financial services are still in an early stage of development. The market demand is clear, however, and we believe this is a very definite business opportunity.”
It also serves as a valuable level of diversification for Huobi in a fast-changing industry.
“Although Huobi is currently a leader in the cryptocurrency industry, this industry is likely to undergo far-reaching changes in the future. Exploring public chain technologies and business models both keeps us innovative and serves as a strategic defence,” Li added.
This project, currently under the to-the-point working name of Huobi Finance Chain, is designed to let a wide range of organisations deploy their own blockchains, tokenised assets and DeFi services, including lending services, stablecoins, security token offerings, payments, DEXs and more.
“Our vision is to build the infrastructure for the future decentralized economy, so we’re thrilled to partner with Huobi to bring our technology to the financial sector,” said Nervos co-founder Kevin Wang. “More and more assets are being tokenised and moved to the digital world, including both native cryptocurrencies and traditional physical assets. The financial industry is now at an inflection point, and together with Huobi, we’re well positioned to help it modernise its services for the decentralized future.”
There are many recent moves that may have catalysed Huobi’s diversification into decentralised finance, including the reveal of new FATF guidelines for cryptocurrency exchanges, and Huobi emphasises that it aims to create a compliant and legally very approachable DeFi ecosystem.
For a sense of a timeline on these developments, and an indicator of how big this development could become, it’s worth noting that Nervos is still on testnet, with its mainnet launch and token minting scheduled for late 2019, and that Nervos is funded by some of the biggest names in (and out) of blockchain in China, including China Merchants Bank, Sequoia China, Polychain Capital and more.
Disclosure: The author holds BNB and BTC at the time of writing.
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