The world’s largest crypto exchange Binance has entered into an agreement with an anonymous banking partner to attract large corporate investors and eliminate counterparty risks.
Binance reports that the deal will allow institutional investors to continue OTC trading with collateral that will be under the control of a partner bank. The arrangement should work out counterparty risks, which today are of great concern to institutional investors. Thus, an infrastructure resembling a traditional financial market should be created. Investors will be able to prorate their crypto assets based on their level of risk tolerance.
The collateral kept at the partner bank can be presented in the form of treasury bills. This will give an added advantage as the cash equivalent is an income asset.
“Counterparty risks in the crypto industry have long troubled institutions. Our team of cryptocurrency and traditional finance experts has been exploring a possible three-way banking deal to solve the problem for over a year. We have developed a solution thanks to which large companies will be able to optimize cryptocurrency investments, working according to the model of trading behavior in traditional markets. We are in active discussions with several banking partners and institutional investors who are interested in this initiative,” commented Binance Head of Institutional Investment Catherine Chen.
Binance does not name the financial organization with which the partnership agreement has been concluded, but the crypto exchange claims that other trading platforms do not yet have similar agreements with banks.