Popular crypto exchange, Binance made history after executing the first crypto triparty agreement with a third-party banking partner. In a statement, Binance noted that the in-crypto arrangement will enable institutions to fulfill risk management responsibilities by pledging fiat or its equivalent trading collateral with banking custodians.
More so, it is expected that the solution will allow institutional investors to entrust trading collateral in the custody of a third party banking partner. It also addresses every counterparty risk that institutional investors have continued to face in recent years. By leveraging this solution, they can now proportion their holdings based on the level of their risk tolerance.
While collateral that can be entrusted to the third-party banking partner can be in the form of fiat, it can also be in the form of its equivalent, particularly Treasury Bills. Binance is the first exchange to offer this kind of solution in the crypto and blockchain world.
According to the Binance Head of VIP, Catherine Chen, counterparty has become one of the biggest issues facing institutional investors in the crypto world. Chen added that the exchange’s team alongside experts in the traditional industry have been exploring all possible means to address this challenge since a year ago.
Therefore, the result of the joint efforts, according to the exec, birthed the emergence of this solution. With the arrangement, Chen believes these investors will now be able to optimize their collateral and crypto investments.
Binance focusing on improving user’s experience despite regulatory issues
Despite the regulatory and legal issues ravaging Binance, it has remained undeterred and has continued to show great efforts in improving its service delivery. Don’t forget that Binance and its former CEO, Changpeng Zhao, have been embroiled in different lawsuits, particularly in the U.S.
Regulators in the country accused CZ of operating an illegal exchange and sham compliance program. In a legal filing, the regulator alleged that Zhao flouted the regulatory standards in the country for his commercial advantage.
CZ stepped down from his active role in the exchange amid the issues. He also pleaded guilty to the charges against him and agreed to a settlement with the Department of Justice. After stepping down, Zhao announced Richard Teng, the former Global Head of Regional Market as the new CEO of Binance.
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