BBVA Enters Partnership with Binance to Enhance Customer Asset Protection
Spain’s third-largest bank, BBVA, has partnered with Binance, the leading cryptocurrency exchange, to provide custody services aimed at safeguarding customer assets during trading operations. The Financial Times reports that this collaboration comes as part of Binance’s strategy to bolster user security in light of increasing regulatory scrutiny.
Key Features of the Agreement:
- Custody Services: BBVA will manage user funds in U.S. Treasuries, which Binance will recognize as collateral for trading.
- Risk Mitigation: By isolating the assets in BBVA’s custody, the risk of loss in case of an operational failure at Binance is significantly reduced.
- Broader Trend: The move aligns with the ongoing trend of cryptocurrency exchanges implementing more rigorous controls and transparent fund management practices.
Trust in Crypto
Binance is collaborating with BBVA to enhance custody services for users (Vadim Artyukhin/Unsplash).
Industry Context
The partnership marks a pivotal shift from traditional practices where exchanges handled user assets directly. This change was prompted by notable incidents like FTX’s collapse in 2022 that left many users stranded without access to their funds. By adopting this custody model, Binance aims to restore confidence and adhere to rising standards for crypto exchanges.
BBVA has been progressively embracing the digital currency ecosystem and recently launched its trading and custody services via its app. As part of its commitment, it has been advising clients to allocate portions of their portfolios to Bitcoin and Ether.
For further reading, check out the full agreement here.
