PDAX gears up for trading surge amidst Binance market exit
The Philippine Digital Asset Exchange (PDAX), an order book exchange, is planning to take full advantage of Binance’s regulatory issues in the Philippines, with the expectation of an uptick in trading volume as a direct consequence.
Market opportunity
According to a Filipino English-language broadsheet publication, The Daily Tribune, PDAX CEO Nichel Gaba sees the exit of Binance, flagged by the Securities and Exchange Commission (SEC) as an unauthorized exchange in the Philippines, as a pivotal moment for local virtual asset service providers (VASPs) to expand their market presence. Gaba envisions that the anticipated migration of traders from Binance could propel the country’s cryptocurrency trading volume to an estimated $6 billion by 2024.
Data from the Bangko Sentral ng Pilipinas (BSP) demonstrates that there are currently 17 VASPs in the Philippines, with 10 operational and seven inactive. As one of the operational ones, PDAX is preparing for the expected growth in the local sector.
The SEC in the Philippines has been actively working towards imposing a ban on Binance, citing various issues both locally and internationally. Gaba predicts that this development will prompt a substantial number of Filipino cryptocurrency traders to seek alternative, legitimate trading platforms. Gaba stated:
“Now that Binance is being banned, there are a lot of users wondering where they can go and the best option for them is to go to a licensed exchange like PDAX. Our strategy as a company is to focus on being the best alternative.”
Binance ban countdown
According to local news outlet BitPinas, the head of the Philippines SEC, Kelvin Lee, clarified that Binance and any other unregistered exchange issued with an advisory have three months before they are banned from the country.
Addressing the confusion surrounding the ban during a panel discussion on Wednesday, Lee stated that the ban would be in effect three months from the issuance date of Nov. 29. In that way, time has been allowed for feedback and potential extensions.
While the original recommendation was for a shorter transition period, Lee extended it, considering the upcoming Christmas holiday, stating, “Not to make it hard for Filipino investors during that time.”
Two additional exchanges banned
In addition to Binance, Lee mentioned that OctaFX and MiTrade, along with other exchanges that have received advisories for unregistered operations, will also face bans after three months. The local SEC disclosed having a sizable list of unregistered exchanges that will gradually emerge.
Responding to criticisms of the ban, given that some users find Binance to be “cheaper” than other registered exchanges, Lee emphasized the importance of compliance costs and consumer protection. He urged local investors to “invest in registered entities” among the 17 VASPs registered in the country that offer fiat-to-crypto services.
The BSP-regulated VASPs are expected to process crypto assets worth approximately $3 billion by the end of the year. However, this estimate does not take into account unregulated transactions occurring outside of VASP channels.
