Binance’s partnership with BBVA introduces a new custody solution for customer funds, enhancing security and restoring trust in centralized crypto investing.
-
Binance’s custody deal with BBVA aims to restore confidence in crypto investing.
-
Users can now custody assets with BBVA, ensuring enhanced security through bank-backed collateral.
-
Binance’s move may bridge the gap between institutional investors and the crypto ecosystem.
Binance’s new custody partnership with BBVA enhances security for customer funds, aiming to restore trust in the crypto ecosystem.
| Custody Partner | Security Measure | Comparison |
|---|---|---|
| BBVA | US Treasurys | Higher trust than previous custodians |
What is Binance’s New Custody Solution?
Binance’s new custody solution is a partnership with BBVA, allowing customer funds to be held in US Treasurys at the bank. This enhances security and reduces counterparty risk for users.
How Does This Partnership Improve Security?
This partnership provides a safer environment for crypto investors by ensuring that customer funds are managed by a reputable bank. The move is crucial for restoring trust in centralized exchanges following past scandals.
Frequently Asked Questions
What is the significance of Binance partnering with BBVA?
This partnership signifies a shift towards traditional finance safeguards in the crypto space, aiming to restore investor confidence.
How does this affect Binance users?
Binance users can now enjoy increased security for their assets, as funds are held in a reputable bank, reducing risks associated with centralized exchanges.
Key Takeaways
- Enhanced Security: Binance’s partnership with BBVA provides a safer custody solution for customer funds.
- Restoring Trust: This move aims to rebuild confidence in centralized crypto investing.
- Institutional Bridging: The partnership may facilitate greater engagement from institutional investors in the crypto ecosystem.
Conclusion
Binance’s collaboration with BBVA marks a significant step towards enhancing security in the crypto space. By integrating traditional finance safeguards, Binance aims to restore trust and attract institutional investors, paving the way for a more secure future in cryptocurrency.
As trust in crypto exchanges remains low, Binance’s new custody deal with BBVA marks a shift toward traditional finance safeguards.
Binance has partnered with BBVA, one of Spain’s biggest banks, to act as an independent custodian for customer funds, according to a Friday report in the Financial Times citing two people familiar with the arrangement.
The move reportedly aims to restore confidence in centralized crypto investing following scandals such as the FTX collapse and Binance’s own regulatory troubles.
The FT report said Binance users can now custody assets with BBVA, offering enhanced security through bank-backed collateral. Binance has also partnered with Switzerland’s Sygnum and FlowBank to serve as independent custodians.
With traditional finance stepping in to provide safer, more regulated custody solutions, Binance’s move may help bridge the gap between institutional investors and the crypto ecosystem, according to the FT.
The FT’s sources said Binance’s custody deal with BBVA involves customer funds being held in US Treasurys at the Spanish bank. Binance then accepts those assets as margin for trading on its platform, reducing counterparty risk.
Cointelegraph contacted Binance to confirm its partnership with BBVA. Binance acknowledged receiving the request but had not provided any further details by publication.
Continued access to customer funds
The sources told the FT that Binance has partnered with only a handful of banks for independent custody of customer funds, but added that BBVA has a better “name recognition” than other banking partners, adding a layer of trust.
On Thursday, Binance also launched a service to support the conversion of crypto to fiat and withdrawal directly to Mastercard for European users, with near-real-time availability. The move aims to streamline off-ramping of funds for users across the European Economic Area (EEA) and the United Kingdom.
Prior to banking custodians, Binance crypto investors relied wholly on the exchange for asset storage. Entrusting custody to credible banks adds a layer of protection to user funds.
For example, the collapse of the FTX exchange in 2022 blocked many customers’ access to their funds, causing substantial financial pressure and increased regulatory scrutiny across the crypto ecosystem. FTX locked around $175 million worth of investments from Genesis Trading alone.
WazirX continues to hold customer funds hostage
Investor fears were renewed recently when Indian crypto exchange WazirX, which once had strong ties with Binance, froze withdrawals for its 16 million users following a major security breach.
While WazirX tried to rope Binance into repaying the losses, the latter distanced itself from the Indian exchange, saying:
“Their [WazirX’s] attempts to shift responsibility is a disappointing deflection tactic, but it should not distract anyone from the glaring issue to be addressed here: the need for the WazirX team to be held accountable for user funds lost under their management.”
Magazine: How Ethereum treasury companies could spark ‘DeFi Summer 2.0’
