Huobi Cloud, a 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 SaBi, the Nigerian exchange, with about $100,000 worth of daily crypto trading volume, and HIZA, the South African exchange, which is expected to go live in the fourth quarter.
Mohit Davar, EMEA Regional President of Huobi Group, described how these institutions are looking to leverage an international platform’s security resources and deeper liquidity, otherwise difficult to recreate on their own.
According to Davar, 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.
“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.” Mohit Davar
However, 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. The company said that through the cloud service, Huobi is spreading its wings to enable a wider range of institutions besides its existing partners to trade cryptocurrencies.
The cloud service is going to offer core functionalities of the global exchange, ranging from cryptocurrency trading to the security system that guards such transactions.
So, 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 would want to trade digital assets.
Davar also said that Huobi offers exchange services through 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 of dollars plus 50% of their revenue from transaction fees on the platform.” Mohit Davar
In May 2019, David Chen, the Senior Business Director of Huobi Group, told that the unit had earned $1.5 million in net profit from cloud partnerships gone live between Oct 2018 and May 2019.
Thus, at the same time, Chen also said that there were 150 platforms under the Huobi Cloud umbrella, plus 80 partnership deals in the pipeline.