Binance Partners with Spanish Bank BBVA to Hold Exchange Clients’ Assets: FT

Binance is the world’s largest crypto exchange, and BBVA, Spain’s third-largest lender, joins a small number of independent custodians that work alongside it, according to the FT, citing people familiar with the arrangement. 

Neither company has made an official announcement or confirmed the report yet.

While Binance had previously been unwilling to use external partners to hold assets, they caved in to customer pressure last year, allowing some traders to use Switzerland’s Sygnum Bank and Flow Bank, alongside the previously approved custodian Ceffu. Ceffu had been described by US regulators as a “mysterious Binance-related entity”. 

Need for oversight

Customers tolerance for storing assets entirely on an exchange dipped after the 2022 collapse of FTX, which left thousands of customers with lost assets they may still be waiting to recover. Storing assets with a custodian that has oversight from regulators is in theory safer than leaving it on the exchange. 

According to the Financial Times’ insiders, the agreement will be for customers’ money to be stored in US treasuries, which Binance will accept as margin for traders on the exchange. The unnamed source added that it is “mitigating a hypothetical FTX 2.0.”

Given Binance’s past of SEC violations and a record-setting fine, it’s possible that customers want to ensure the extra level of safety and stability that external storage provides.

Mainstream adoption

The move reflects the increased willingness from traditional financial institutions to dive into the crypto world, as regulatory clarity and mainstream adoption grows. And it isn’t BBVA’s first step into crypto. As of 4 July, the company offers BTC and ETH trading on its mobile app. In the announcement for the new crypto trading feature, Francisco Maroto, Head of Digital Assets stated “Mirroring BBVA’s leadership in digitization and innovation, we are continuing to grow our digital assets business.” 

A partnership with Binance will mark one more step for the Spanish bank into the crypto world.