Key Takeaways:
- Binance partners with BBVA to offer off-exchange asset custody for traders.
- Funds held in U.S. Treasuries at BBVA will serve as trading margin.
- Move reflects traditional banks’ growing role in crypto security.
Binance and BBVA Team Up for Off-Exchange Asset Custody
According to a report from the Financial8 Times, Binance is the largest crypto exchange in the world and it is joining forces with BBVA which is a Spanish and Latin American bank in the venture that will allow customers to store their assets off-exchange. This new partnership makes BBVA the one of the few independent custodians who serve the Binance customer base, providing them with an additional security layer for their digital assets.
The deal allows the funds of the traders to be kept in U.S. Treasuries at BBVA which Binance then gives as the trading margin. This arrangement is the same as the one which traditional finance has for the purpose of reducing counterparty risk — a safety measure which is not yet widely accepted in the crypto sector. The decision is taken against the background of the investors’ wariness which is rising after Binance has been fined $4 billion in the U.S. in 2023 and after the FTX that went bankrupt in 2022 has been quoted for billions in the court.
The source who is familiar with the transaction mentioned that BBVA has such a good reputation that it is possible that it can significantly reduce the tasks of due diligence for the clients who are still deciding they don’t want to be exposed to the exchange relatedz risks. The partnership is also indicative of the increasing existence of large banks that are ready to do business with the bitcoin sector, a situation that has been backed up by the Trump administration’s attitude towards cryptocurrency in the U.S. and the European Union’s MiCA regulatory framework, the crypto-friendly stance.
Traditional Finance Embraces Crypto Custody Solutions
In July, the Spanish and Mexican bank BBVA, one of the largest banks in Europe, decided to build a new blue chip tech stack and offered a set of cryptocurrency-related services including bitcoin and ether trading and custody services. Moreover, the institution has encouraged wealthy investors to dedicate between 3 and 7 percent of their assets to the crypto sector.
Binance began offering off-exchange custody options in January 2024 through partners like Sygnum and FlowBank, reducing reliance on its in-house custody provider, Ceffu. The trend is accelerating across the industry — platforms like Deribit, OKX, and Bitget have also introduced off-exchange trading solutions to attract institutional investors seeking secure asset management.
Summary
Binance’s partnership with BBVA marks a significant step in bridging traditional banking security standards with crypto trading efficiency. By separating custody from trading, the move could set a new benchmark for risk management in the digital asset industry.
Also Read: Trump Order Opens 401(k)s to Crypto and Private Markets
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