Binance Revolutionizes Institutional Crypto Trading with Triparty Banking Agreement Pilot
Binance, the world’s largest cryptocurrency exchange, has successfully executed the first-ever cryptocurrency triparty arrangement with a third-party banking partner. This innovative solution aims to address the primary concern of institutional investors – counterparty risk.
The triparty arrangement allows institutional clients to securely hold trading collateral off-exchange in the custody of a trusted banking partner. This strategic initiative replicates a proven framework from traditional financial markets, empowering investors to adjust their crypto-asset allocation based on risk tolerance. Collateral, in the form of fiat equivalents like Treasury Bills, adds the advantage of being a yielding asset.
Catherine Chen, Head of VIP and Institutional at Binance, emphasized the longstanding concern over counterparty risk within the industry. The Binance team, comprised of both crypto experts and traditional finance professionals, has diligently worked on the banking triparty agreement for over a year. Chen revealed ongoing discussions with various banking partners and institutional investors expressing keen interest in participating.
This pilot program positions Binance as the sole cryptocurrency exchange offering a triparty solution, effectively bridging the gap between crypto market opportunities and traditional financial risk controls. The move sets new standards for institutional crypto trading, providing a secure avenue for existing Binance VIP and Institutional clients, as well as welcoming incoming institutional investors seeking to leverage the market’s deepest liquidity.