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Binance is working with banking giant BBVA to hold customer assets off-exchange.
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Funds will be kept in U.S. Treasuries at BBVA and used as trading margin.
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The setup aims to reduce counterparty risk and improve security.
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The move reflects growing ties between traditional banks and crypto firms.
A New Custody Approach
Binance is partnering with Spanish and Latin American banking leader BBVA to let customers store funds off the exchange. The Financial Times reports that BBVA will act as an independent custodian, keeping traders’ funds in U.S. Treasuries while Binance accepts them as margin for trading.
Reducing Risks After FTX
This setup mirrors traditional finance practices, creating a separation between trading and custody. It aims to reassure investors after Binance’s $4 billion fine in 2023 and the collapse of FTX in 2022, which left billions locked in bankruptcy.
Banking-Industry Interest Grows
BBVA has been expanding in crypto, offering Bitcoin and Ether services and advising clients to allocate a portion of portfolios to digital assets. The partnership signals a broader shift, with traditional banks becoming more open to crypto partnerships.
Industry-Wide Trend
Binance is not alone. Other exchanges like Deribit, OKX, and Bitget have also developed off-exchange custody options for institutions, reflecting increasing demand for safer trading environments.
