Binance, the world’s largest crypto exchange, has successfully executed the world’s first cryptocurrency triparty arrangement with a third-party banking partner. This innovative solution offers institutional investors the ability to securely maintain trading collateral off-exchange entrusted to a trusted banking partner.
The triparty arrangement, revealed in a recent press release, addresses a longstanding concern among institutional investors about counterparty risk. Binance’s pioneering initiative introduces a framework reminiscent of traditional financial markets, allowing investors to tailor their crypto-asset allocation according to risk tolerance.
Notably, collateral stored with the banking partner can take the form of fiat equivalents, including Treasury Bills, presenting the added benefit of being a yielding asset. Catherine Chen, Head of VIP and Institutional at Binance, emphasized the significance of mitigating counterparty risk. She stated:
Our team of crypto natives and traditional finance professionals has been exploring a banking triparty agreement for more than a year to address their concern. We’ve developed a solution that ensures our institutional clients can optimize their collateral and cryptocurrency investments, modeled after the traditional markets’ trading conduct.
This milestone represents the first of several pilot projects initiated by Binance, solidifying its position as the sole cryptocurrency exchange offering such a groundbreaking solution. Chen also disclosed ongoing discussions with various banking partners and institutional investors expressing keen interest in participating.
User Behavior Shift On Binance Post $4.3B Settlement
Meanwhile, data from blockchain analytics firm Nansen indicates a notable shift in user behavior on the Binance platform. After the recent $4.3 billion settlement with the United States Department of Justice, the platform experienced a surge in withdrawals, surpassing $1 billion.
However, recent data reveals a change in this trend, with a net inflow of $87.4 million in Ethereum token deposits over the past week. The net withdrawal of multichain tokens, including Ethereum, BNB, AVAX, and MATIC, amounted to $59.2 million during the same period.
Despite the tumultuous turns, the value of BNB, Binance’s official token, has remained relatively stable at $227 over the past month. The exchange has witnessed over $7.62 billion in user withdrawals but has also seen deposits totaling $7.56 billion in digital assets, marking a dynamic period for one of the leading players in the crypto space.
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