On July 24, Circle revealed that Binance will start accepting USYC stablecoin as collateral specifically for institutional clients, marking a significant development in crypto-backed lending. Unlike traditional collateral options such as Bitcoin, USYC offers a revenue-sharing model that appeals to institutional investors seeking stable returns. Despite the growing adoption of crypto assets, some traditional financial institutions remain cautious due to past market disruptions.
Catherine Chen, Head of Binance VIP and Institutional Business, highlighted that the fallout from the FTX collapse has heightened risk aversion among institutional players regarding collateralized trading on exchanges. To mitigate these concerns, Binance introduced the Banking Triparty service, which partners with regulated banks to hold assets as custodians, enabling secure and compliant collateralization for crypto trades.
Additionally, Binance is advancing its ecosystem by integrating cUSDO, a yield-generating stablecoin issued by OpenEden Digital, a Bermuda-regulated entity. This move aims to enhance liquidity and accelerate settlement times, reinforcing Binance’s commitment to institutional-grade solutions in the evolving digital asset landscape.