The largest cryptocurrency platform in the world launches new services to attract institutional investors
The cryptocurrency giant Binance is transforming its approach to the institutional market with new services specifically designed for banks, investment funds, and wealth managers. Through its VIP and Institutional division, the company aims to bridge traditional finance and the crypto world, developing solutions such as the Tripartite Banking Agreement, which allows institutions to operate in crypto without directly touching digital assets, and Binance Wealth, a new service for licensed wealth managers.
VIP Program for Institutions
Binance's institutional division has a VIP tier system that ranges from 1 to 9, where the first three levels are aimed at high net worth individual investors, while levels 4 to 9 focus on institutional clients. "Our mission is to ensure that we provide the necessary support 24/7 and specialized services for these important clients," explains Catherine Chan, head of Binance VIP & Institutional, during Binance Blockchain Week in Dubai held at the end of last October.
This segmentation allows the platform to tailor its services according to the specific needs of each type of client, from individual traders with a high volume of activity to large financial institutions that require more sophisticated solutions.
Solutions for Traditional Banking
One of the most significant innovations is the Tripartite Banking Agreement, a service that allows institutions to operate in the crypto market without the need to hold digital assets directly. "Many institutional clients trust Binance, but they have their own internal risk controls, compliance considerations, or local regulations that prevent them from holding funds on Binance.com," says Chan.
The system works by allowing clients to deposit dollars or equivalent collateral in an associated bank, while Binance provides them with a loan to operate on the platform. This solution has been especially relevant for clients in VIP levels 7 to 9.
Challenges in Regulation
Despite the advancements, Chan acknowledges that the biggest challenge for institutional adoption remains the regulatory framework. "For major institutions to participate in this asset class, they generally will need regulatory approval," he explains. This particularly affects insurance companies, pension funds, and sovereign wealth funds.