Huobi Cloud, part of the Huobi cryptography group, has announced plans to provide more local financial institutions with white-label cloud-based exchange services in the Middle East and Africa.
Existing institutions include Nigeria-based SaBi Exchange, with a daily cryptographic transaction volume of about $ 100,000, and the South African HIZA Exchange, which is expected to be operational in the fourth quarter.
Mohit Davar, Huobi regional chairman for the EMEA region, told CoinDesk that these institutions were looking to leverage the security resources of an international platform and to have more cash, which would otherwise be difficult to recreate alone. .
Huobi Cloud has been talking with potential partner companies in 10 countries in the Middle East and Africa, hoping to launch two or three this year, according to Davar.
"We can not market our product in more than 200 countries. There are some markets where it is best to partner with someone, "Davar said.
This effort is part of Huobi's expansion into the Middle East and Africa, following the launch of its fiat-crypto portal in Turkey this month. With the cloud service, Huobi is spreading its wings to allow more institutions, in addition to its existing partners, to exchange cryptocurrencies, the company said.
The cloud service will provide the essential functionality of the global switch, ranging from cryptocurrency trading to the security system that protects such transactions.
According to Davar, the firm is looking for more and more institutionalized clients with a significant user base of their own existing services. Huobi targets institutions such as credit unions, banks, or financial technology companies with a large group of customers who want to trade digital assets.
Davar added that Huobi offers exchange services via its API, which could be used for localized exchanges, or a white-label cloud service, which is much simpler than launching a fully localized exchange.
Cloud service generates a stream of new profits, rather than reducing their local market share, due to a revenue-sharing royalty structure. Customers will pay an upfront fee of the order of hundreds of thousands of dollars, plus 50% of their revenue from transaction fees on the platform, said Davar.
In May, David Chen, senior director of the Huobi Group's activities, told CoinDesk that the unit had generated a net profit of $ 1.5 million through cloud partnerships commissioned between October 2018 and May 2019.
Chen said that at the time, there were 150 platforms under the umbrella of Huobi Cloud, plus 80 partnership agreements underway.