Meet Aissata, a single mom living in Dakar, Senegal. She scrupulously puts away each franc, hoping to start a small enterprise and provide for her children’s future beyond the harsh realities of today. Her constituency is cut off from traditional banking, weighed down by exorbitant fees and red tape. All of a sudden, she starts hearing about crypto, this digital, magical promise of financial freedom. With its ads plastered everywhere and promises of low-risk, high returns, Binance looks like her golden ticket. Is it really?
CryptoQuant data paints a clear picture: Binance is the undisputed king of the crypto hill. We hear widely circulated claims trumpeting Binance’s dominance in non-Bitcoin inflows, surpassing Coinbase and others by more than a factor of 10. On the 2024 Nov-Dec rally, Binance handled an incredible 59k daily altcoin inflow txs. It's a torrent of digital assets, a testament to Binance's power. What does this mean for Aissata? Does her $10 investment in Dogecoin really enjoy the fruits of these huge inflows? Or is she merely a pennypincher in a billion dollar market, while the whales get all the benefits? When the tide recedes, to whom does it leave behind?
Is Binance Truly Democratizing Finance?
Let’s face it—crypto is sexy, particularly to those who have been marginalized by our current financial systems. They want access, and Binance offers them a seat at the table – or at least next to the table. Its platform has opened access to financial services for the unbanked, allowing individuals to move cross-border remittances at a fraction of the cost of traditional services. Aissata could, in theory, receive money from a relative working in France much faster and cheaper than through Western Union. That's powerful.
The reality is often more complex. We know the crypto market is incredibly volatile. The stakes are high for Aissata, who is controlled by social norms and lacks access to information and capital. One random tweet of frustration from Elon Musk can instantly erase her investment. A serious regulatory crackdown in China could change that in an instant. And of course there’s the constant danger of scams and hacking, which go after the naïve and gullible.
Whose Pockets Are Really Getting Lined?
We need to ask ourselves: who really benefits from Binance's dominance? Or is it Aissata who became rich beyond her wildest dreams? Or is it the institutional investors, hedge funds, and early adopters who took advantage of crypto’s meteoric rise. The data suggests the latter. The combination of Binance’s superior infrastructure and deep liquidity naturally draws large-scale traders looking for the fastest, most profitable trades. These speculators profit from sudden altcoin-price increases caused by massive inflows. When the market inevitably corrects, smaller investors like Aissata are stuck holding the bag.
Think of it like a casino. The house always wins, right? Binance supplies the tables, the chips, and the promise of a huge payout. The deck is rigged for the everyday gamer. The exchange only profits from transaction fees, so it doesn’t matter to the exchange if its users win or lose money. Given its deep pockets, user data and powerful algorithms, Binance can be said to at times manipulate the market for its benefit.
Protecting The Vulnerable Masses
There are good reasons, including the fact that I think we need to change the narrative. It’s time to cut through the noise and get serious about measuring the positive, concrete impact that crypto can have on the world. Are market regulations enough to ensure consumer protection in countries like Senegal? And are there enough educational materials available to teach traders about risks versus rewards of crypto trading?
The allure of technological innovation can be alluring. We can’t forget the human toll that frequently comes with it. What we actually need is responsible innovation in the crypto space. Binance, as the industry leader, has a moral imperative to do better by the communities they’ve marginalized—even if the law doesn’t require it. This means investing in financial literacy programs, working with local regulators to establish consumer protection standards, and actively combating scams and fraud.
Binance’s dominance in stablecoin transactions— especially USDT on the TRON network —isn’t pretty either. As USDT provides stability amid the crypto-market’s ongoing volatility, questions regarding USDT’s stability and reserves have raised eyebrows. Are users in developing countries being informed about the risks when they use USDT to safeguard their assets from collapsing currencies? It’s very important they know what risks are out there.
The bigger question is not whether or not Binance wants to take over the crypto world. Not if it does so without consideration to what that means socially or economically. It's time for Binance to leverage its power not just for profit, but for the betterment of the communities it serves. It's time to ensure that the promise of financial freedom doesn't turn into a nightmare for the most vulnerable among us. The forgotten voices deserve to be heard. Only then can we really start believing the stories that crypto is democratizing finance.
