Changpeng Zhao is chief technology officer at OKCoin, a China-based bitcoin and litecoin exchange that is now seeking to extend its services to the international market.
OKCoin is one of the largest exchanges in the world by exchange volume, according to data from Bitcoinity, and boasts more than 90 employees. The company raised $10m in Series A funding in March as part of a round led by Ceyuan Ventures, Mandra Capital and VenturesLab.
Zhao attended The North American Bitcoin Conference in July, where he introduced his exchange to the international bitcoin audience and announced the launch of the firm’s USD and HKD deposits and withdrawals. At the conference, CoinDesk sat down with Zhao for a conversation that aimed to assess why OKCoin believes it will succeed in the international market.
CoinDesk: Earlier this year, you joined OKCoin following a stint at Blockchain and after what had really been a long period of uncertainty in China relating to bitcoin regulation. What made you decide that you wanted to leave what is maybe a more stable market for China?
Changpeng Zhao: Blockchain is a great company, and I think it is a privilege for anyone in the bitcoin ecosystem to be working for that company. But, Blockchain’s core product is not my core strength. I have worked there as a technologist. They have a very simple, very good wallet product, and they have a lot of traction. But, I thought I could leverage my experience more on the financial trading side, this is where most of my experiences are.
OKCoin is the best exchange in the world so I joined them. They also happen to be Chinese, which is coincidental [laughs]. If I felt another company was the best company, I would have come there.
That seems like a strong statement. What is about OKCoin that gives you the confidence to make that claim?
There are more bitcoin exchanges in China than anywhere else in the world. There are about 30 bitcoin exchanges in China and, because there are so many, competition is very fierce. Given that competition, the best rise out. Not only OKCoin, but all the China exchanges have the best customer service.
OKCoin has a 24/7 customer support line you’ll call and find somebody real. You don’t find that on any exchange right now. You don’t find that anywhere else. OKCoin’s technology platform is very, very stable. Some other platforms in China have issues, even as of yesterday, pricing issues.
So, I just really love the team, I met a couple of clients and I was excited.
One of the reasons OKCoin brought you on was to appeal to Wall Street investors by using your experience at Bloomberg – something a lot of exchanges are looking at right now. How do you plan to attack this market?
We are going to make a huge international push, which is going live within the next 24 hours, and we’re going to start accepting USD deposits and USD withdrawals.
The international play is a huge play for OKCoin, but the international site is going to be separate from the Chinese site. They are going to be managed by the same team, but the international site will be geared very heavily to international users. The customer credibility, we need to establish that over time, but I think that’s going to come when you have a superior product.
How will the sites be different? Or, in other words, what’s an example of a concept that appeals to western bitcoin users versus Asian bitcoin users?
Western people like clean interfaces, they like the Google-type search bar. Chinese people like a lot of things on one page. How do you combine those two things together? [laughs]
I’m not kidding, the western mentality, when I saw a page like that, I hated it. But, it’s those little things that matter, so we are actually still trying to figure out how to best satisfy both worlds, while not having two separate products.
We may later have different things for different reasons. Chinese people like to buy and sell. Futures is very active in China, whereas options might be very active outside of China. That’s also another reason I joined OKCoin is the complementary skills, we have very different skills. Having a diverse management team on the senior level works quite well.
How much of the market do you anticipate OKCoin will be able to capture? Do you see the current international market as being weak?
We want to take all of it if we can [laughs]. We feel like our product is superior to any other exchange in the world right now, in terms of time for deposits and withdrawals, being able to talk to a real person with customer service.
From a product perspective, we think we are far ahead of any competitor. Nobody has a mobile app where you can trade and view candlesticks. We launched the Android version maybe two to three weeks ago, the iOS version went live two days ago. Nobody has that. We have a PC client that supports multiple screens, so you get a Bloomberg-type experience, nobody has that.
We have algorithmic trading, some people have some of that. Nobody has icebergs. We never have price jumps, random bugs, all that never happens on the exchange. Our product is very stable and its very fast. We’re confident our product is superior.
Of course, even if you have a better product, you have to ensure it gets to consumers. Are you looking to move past the PR slip-ups you guys have had in the past?
You’re talking about ‘The China King of Bitcoin‘ [laughs]. That release is going to be the last of its kind, it had grammar errors, we laughed at it. Internally, we rationalized it by saying it’s publicity, you’re creating a buzz.
But, the image that we want to build, and we will build, is that of a professional financial services company. It’s not just an Internet company, it’s not just a bitcoin company. We are an exchange. By every measure, bitcoins are very valuable. They’re worth a lot more than the US dollar right now. So, we are in most respects a financial services company.
We’re going to be very serious about that and follow that image. I brought in the PR firm that will help us with that, and we’re going to change. That was fun, but that stage is over.
Now, that you’re moving internationally, do you plan to engage with US regulators to enter the market?
Sooner or later, we’ll have to go through that. We have not started [the process] yet. Even though we’re going to accept US dollars, we’re going to accept it internationally in other countries, mainly Hong Kong, which is easy from a financial transaction point of view.
We’re probably going to attack some of the other markets which are easier than the US first. The US is a big market, but it takes a lot of money and a lot of energy to crack that nut. We’re OK to be the second exchange to crack that nut.
When we feel we can navigate that process quickly and without too much trial and error. Even if it’s costly, we will go through it. We have money, we can raise more money if we want to. We’re OK with someone trying first and us coming later.
Historically, Asian brands have had some issues gaining a foothold in America, but there are some big success stories. Are there any in particular you look to as ones you’d like to emulate?
That’s precisely why we picked the OKCoin name. In China, we don’t have a Chinese name. Compared to Huobi and BTC China, they are very China specific. We picked OKCoin to be very neutral.
Historically, there hasn’t been too many. Well, Samsung and Sony did that really well. A lot of Japanese companies did it really well, but those companies are not doing well at the moment. Sony, Panasonic, all of them did really well in the US.
With bitcoin it helps a lot, since bitcoin is cross border anyway, and the industry is new.
A lot of companies in the US – Coinbase and Circle, for example – are trying to be more than exchanges. Is OKCoin looking to make a similar shift, especially as it enters new markets?
For the moment, we’re very focused on the exchange product, and that itself can go really deep. Algorithmic trading is really deep. All these other things, futures, options … we’re really just on the tip of the iceberg. So at the moment, we don’t have any time to do things like wallets or payment processors.
We have partners who want to work with us, and we may leverage some of that, but our core focus is on exchange, we’re not doing anything. Huobi wants to be the Coinbase of China now. We just want to do exchange products.
- ^ OKCoin (www.okcoin.cn)
- ^ $10m in Series A (www.coindesk.com)
- ^ The North American Bitcoin Conference (www.coindesk.com)
- ^ USD and HKD deposits and withdrawals (www.coindesk.com)
- ^ a stint at Blockchain (www.coindesk.com)
- ^ Blockchain (www.coindesk.com)
- ^ candlesticks (www.coindesk.com)
- ^ The China King of Bitcoin (en.prnasia.com)
- ^ Shutterstock (www.shutterstock.com)
- ^ Changpeng Zhao (www.coindesk.com)
- ^ exchanges (www.coindesk.com)
- ^ North American Bitcoin Conference (www.coindesk.com)
- ^ OKCoin (www.coindesk.com)
- ^ trading (www.coindesk.com)