Dive into the details of BINANCE's latest service for institutional investors, blending traditional banking security with the dynamic world of cryptocurrency trading.
Uncover how this innovative approach addresses counterparty risks and maximizes investment benefits.
Contents
A New Venture by BINANCE
BINANCE announced a new solution on November 30, 2023, aimed at institutional investors.
This service enables clients to store their assets in external partner banks and use them as collateral for trading on BINANCE.
The primary goal of this solution is to mitigate counterparty risk (*1), a significant concern for institutional investors.
It allows these investors to store fiat and cryptocurrencies in third-party banks, rather than depositing them with BINANCE, and then use these stored assets as collateral for trading on the platform.
(*1) Counterparty Risk: The risk of loss arising from the other party in a transaction (counterparty) defaulting on the contract.
Moreover, this service allows for the use of cash equivalents, such as government bonds, as collateral.
This offers the advantage of earning interest from the bank while engaging in trading activities on BINANCE.
Catherine Chen, Head of BINANCE's VIP and Institutional Investor Division, has commented on this new solution for institutional investors.
Counterparty risk has long been a concern of institutional investors across the industry.
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.
We are in close discussions with an array of banking partners and institutional investors who have also expressed strong interest in participating.
BINANCE's Unique Offering in the World of Cryptocurrency and Asset Management
Although BINANCE has reported this solution as a world-first exclusively provided by them, it should be noted that Fireblocks, a company serving digital asset enterprises, announced a similar solution called "Off Exchange" on October 28.
This solution also allows for the storage of funds outside the exchange while enabling trading.
-
Binance Announces End of Support for Binance USD (BUSD): Important Deadlines for Withdrawals and Exchanges
Discover the latest update on Binance's decision to end support for Binance USD (BUSD). Understand the implications for withdrawals, exchanges, and what it means for your digital assets. Read to stay informed and prepared.
続きを見る