Binance Pilots Banking Triparty Agreement to Help Institutional Investors Manage Counterparty Exposure

Main Takeaways

• Binance has successfully executed the world’s first cryptocurrency triparty arrangement with a third-party banking partner

• The agreement allows Binance's institutional clients to hold collateral with the banking partner in the form of fiat equivalent such as Treasury Bills, which has the added benefit of being a yielding asset

• Binance’s solution bridges traditional and crypto markets, setting new standards for institutional crypto trading and counterparty exposure
  

We are pleased to announce that we have successfully executed the world’s first cryptocurrency triparty arrangement with a third-party banking partner. This solution enables institutional investors to keep trading collateral off-exchange in the custody of a third-party banking partner. This is the first in a series of pilot projects initiated by Binance, which is currently the only cryptocurrency exchange offering such a solution.

This arrangement directly tackles the issue of counterparty risk, the primary concern for institutional investors today. It replicates a framework common in traditional financial markets, which enables investors to proportion their crypto-asset allocation based on their risk tolerance. Collateral held with the banking partner can be in the form of fiat equivalent such as Treasury Bills which has the added benefit of being a yielding asset.

Catherine Chen, Head of VIP and Institutional at Binance, said, “Counterparty risk has long been a concern of institutional investors across the industry. Our team of crypto natives and traditional finance professionals has been exploring a banking triparty agreement for more than a year to address their concern. We’ve developed a solution that ensures our institutional clients can optimize their collateral and cryptocurrency investments, modeled after the traditional markets' trading conduct. We are in close discussions with an array of banking partners and institutional investors who have also expressed strong interest in participating.”

This pilot positions Binance as the only cryptocurrency exchange to offer such a triparty solution, effectively bridging crypto market opportunities with traditional financial risk controls. We are excited to be setting the standards for institutional crypto trading with a trusted and secure avenue for our existing Binance VIP and Institutional clients, as well as incoming institutional investors looking to take full advantage of the market’s deepest liquidity on the world’s largest cryptocurrency exchange. 

To learn more about our Banking Triparty solution, please contact your designated Account Manager. If you are not yet a Binance VIP & Institutional client and would like to inquire about our program, please refer to How to Become a Binance VIP.

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