Binance has announced its strategic collaboration with Spain’s third-largest bank, BBVA, to operate an off-exchange asset custody. According to data released today by market analyst Satoshi Club, Binance partnered with BBVA to allow users to hold their tokens off the cryptocurrency exchange.
Solution to Crypto Custody Challenges
For years, the crypto market has struggled with challenges associated with centralized custody, where customers’ money stored in exchanges is at risk of security breach (hacking), regulatory oversight, and mismanagement. The downfall of the FTX crypto exchange in 2022 significantly revealed these risks, diminishing confidence in crypto trading platforms.
Binance, through its alliance with BBVA, aims to resolve these risks by incorporating this traditional financial protection layer into its cryptocurrency network. This integration is part of Binance’s efforts to improve confidence in centralized crypto investing. The collaboration allows customers to keep their tokens within the BBVA infrastructure and take advantage of bank-backed collateral to access secure investment opportunities using their crypto holdings.
As part of the agreement between the two partners, customers’ money will be held in U.S Treasuries under BBVA’s banking platform, which will then utilize these as trading margin in Binance’s network. This setup aims to prevent counterparty risks and mitigate similar cases associated with the 2022 downfall of FTX, where investor funds were frozen because of inadequate protection measures.
Why This Collaboration Matters
This partnership highlights a more advanced friendliness recently among traditional banks to widen their relationship with the cryptocurrency market following the approvals of significant regulations in the European Union and the US.
The move by Binance to collaborate with BBVA happens at a time when traditional lenders increasingly become friendly with trading and holding virtual assets and partnering with cryptocurrency exchanges. This positive sentiment has been bolstered by the Trump government, a strong supporter of the virtual currency industry.
This alliance between Binance and BBVA is more than a technological innovation – it sets a new standard for how crypto assets are stored and managed.
