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Binance’s new 3B user goal
After nine years of building the world's largest crypto exchange, Binance is now embarking on a project that it thinks may end up mattering more than all the trading volume it facilitates.
According to Thomas Gregory, Binance’s VP of payments, the company’s thesis behind building its new payments infrastructure is straightforward: If stablecoins and blockchain-based payment systems can do everything faster and cheaper than the traditional payment system can across the world, then the necessity of bank accounts may become harder to justify over time.
He pointed to some early proof points in some markets where Binance has launched payments systems. In Argentina, where the company enabled QR-code payments through its app earlier this year, Gregory says the company’s head of Argentina has been filming himself buying coffee, riding public transport, and paying for everyday goods entirely through the Binance app.
And in Vietnam, tourists are paying local merchants directly from their crypto balances, Gregory shared, using the company’s credit card, which is live across more than 20 countries via a MasterCard partnership.
Binance’s hyper-localization strategy reflects how seriously it is taking this approach to building out its payments business market-by-market.
Gregory explained that this approach involves building the infrastructure first and then layering local user experiences on top, with small regional teams responsible for making each market work on its own terms.
"Payments should be a hygiene factor," Gregory said. "People go and look forward to shopping, but they don't look forward to paying. No one goes, 'Brilliant, I'm paying now.' But the quantity of money that exchanges hands for day-to-day payments is obviously huge. And it's all going through comparatively very inefficient and expensive legacy systems."
The two problems the company is trying to solve are related but distinct: business-to-consumer (B2C) payments are today often expensive, with fees tacked on, while consumer-to-consumer (C2C) cross-border payments are sometimes worse, as almost every country has its own app, rails, and friction.
"A payment should be the simplest thing on this planet," Gregory said. "But the industry has made it really difficult for a long time."
Gregory views stablecoins as the answer to both these issues, as one can transfer USDT to someone in another country within seconds for a low cost.
The friction that makes stablecoin payments seem foreign or complicated is primarily educational, Gregory said, pointing out that people don't know what to do with a stablecoin once they buy it.
"There's nothing I can't do with a stablecoin which I couldn't do with my normal currency," he said. "Once we get that message across, they shouldn't be scared of receiving it anymore."
Going forward, the company’s broader ambition is to hit 3 billion payment users, in what Gregory playfully calls “TriFi” - a combination of traditional finance, centralized finance, and decentralized finance.
"By embedding our services into banks or partners, we make the whole category bigger. That's much better than fighting over a little bit of existing market share,” Gregory said. "We're seeing a real emergence of traditional finance payments converging with crypto, and it's really exciting. "
Check out the next section for more details and the full episode.
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The latest Talking Tokens podcast 🎙️
For today’s episode, I interviewed Thomas Gregory, VP of Payments at Binance, to talk about what it actually looks like to build a global payment infrastructure from the inside, ranging from QR code rollouts in Argentina to the Binance Card hitting the market across 20 countries and B-Stocks hitting $2 billion in trading volume in a single weekend.
Thomas breaks down why he sees domestic payments in Latin America and Africa as the real unlock for the next wave of adoption, why crypto and fiat are becoming indistinguishable in Binance's super app vision, and why his ultimate benchmark for success is the day isn’t what you’d think it is.
TIMESTAMPS:
00:00 Introduction to Binance's Payments Vision
03:46 Lessons from Fintech Disruptors
06:52 Consumer Acceptance of Crypto Payments
10:26 Hyper-Localization in Payment Solutions
12:19 Metrics for Binance’s Payment Success and Regional Focus
13:35 Binance Card: Flexibility and Usage
17:00 The Future of Crypto as a Payment Medium
26:57 Industry Milestones and Investor Demand
36:55 Addressing Local Currency Preferences and Education
39:10 The Road Ahead for Payments and User Adoption
42:14 Parting Advice
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Please note this content is for informational and educational purposes only. Any views shared should not be considered financial advice, nor should it be used to make investment decisions. Cryptocurrencies are high risk and you should consult a financial professional before making any financial decisions. Make sure you do your own research. We may have a direct or indirect financial interest in content mentioned in this newsletter.