In a bid to strengthen investor trust, Binance has struck a deal with Spanish banking giant BBVA to safeguard a portion of its customer assets.
According to sources cited by the Financial Times, the partnership allows BBVA to hold user funds in U.S. Treasurys, which Binance then accepts as collateral for trading on its platform.
The arrangement is designed to reduce counterparty risk — a concern that has loomed large since the collapse of FTX in 2022 and Binance’s own run-ins with regulators. By integrating a traditional financial institution into its custody operations, Binance aims to offer greater reassurance to both retail and institutional investors wary of keeping all their holdings inside an exchange.
Bringing Traditional Banking into the Crypto Fold
This isn’t Binance’s only move toward external custody. The exchange has also partnered with Switzerland’s Sygnum and FlowBank, but BBVA’s well-established reputation in global banking could add an extra layer of credibility. The bank’s role as an independent custodian marks a notable shift from the exchange’s earlier model, where assets were stored entirely under Binance’s control.
The FT report suggests that Binance’s choice of BBVA may be strategic, not just for security but for optics, signaling to regulators and investors that the exchange is serious about meeting higher compliance standards.
Streamlining User Access to Funds
Alongside the custody deal, Binance has rolled out a new off-ramp for European users, enabling near-instant crypto-to-fiat conversions with withdrawals sent directly to Mastercard. The feature is available across the European Economic Area and the UK, simplifying how users access their funds.
This follows heightened scrutiny on exchanges holding customer assets without external oversight — a concern amplified by the FTX debacle, which left billions in customer funds inaccessible. More recently, Indian platform WazirX froze withdrawals for its 16 million users after a security breach. While WazirX sought to link Binance to the fallout, Binance denied responsibility, stressing that accountability lay with WazirX’s own management.
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
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