"D2X collaborates with ABN AMRO on an off-exchange digital asset safekeeping service"
In a rapidly evolving digital asset landscape, traditional banks and crypto exchanges are forging partnerships to provide institutional-grade security and capital efficiency while supporting regulatory compliance. The latest significant collaboration is between Binance and BBVA, a major Spanish bank.
This partnership enables Binance clients to store their crypto assets off-exchange using BBVA as an independent custodian. Customer funds are held in U.S. Treasuries that serve as collateral for trades on Binance. This arrangement aims to reduce counterparty risk and protect investors, following past industry failures like the FTX collapse.
BBVA holds customer funds in U.S. Treasuries for Binance customers and Binance accepts these as margin collateral for exchange trades. This off-exchange custody service represents a move toward institutional-grade security and capital efficiency. BBVA is among a small group of traditional banks now directly partnering with crypto exchanges to provide regulated custody solutions amid evolving U.S. and EU regulations, notably the EU’s MiCA framework.
The partnership reflects a broader trend of traditional financial institutions embracing crypto infrastructure and responding to increasing demand for independent custodianship following lapses in exchange security. Other recent examples include PNC’s partnership with Coinbase, BNY Mellon acting as custodian for Ripple’s new stablecoin reserves, and Green Dot working with Crypto.com.
Meanwhile, ABN AMRO, a Dutch bank, has also been active in this space. ABN AMRO has partnered with D2X for off-exchange collateral management services for trading crypto futures and options. The collaboration between D2X and ABN AMRO aims to eliminate counterparty risk to the exchange by ensuring client assets remain separated from the trading venue's own holdings.
ABN AMRO has positioned itself at the forefront of institutional digital asset adoption. The bank raised funds last year, with the funding round led by Point72 Ventures. ABN AMRO has favoured public blockchains for their transparency and interoperability. The bank registered its first digital bond on a public blockchain, raising €450,000 for client APOC through a fully digital process in early 2023.
These tie-ins highlight the growing involvement of banks with experience in securities custody and lending venturing into crypto custody and collateral services, embedding digital assets within regulated traditional finance systems. The partnership between Binance and BBVA is just one example of this trend, demonstrating the increasing demand for safer crypto asset control and institutional investor confidence.
Sources:
- Ledger Insights
- Binance Blog
- BBVA Press Release
- CoinDesk
- ABN AMRO Press Release
- The Binance-BBVA partnership marks a significant stride in the finance industry, as traditional banks increasingly venture into crypto custody and collateral services, aiming to embed digital assets within regulated traditional finance systems.
- BBVA's off-exchange custody service for Binance customers is a move towards institutional-grade security and capital efficiency, reflecting the trend of traditional financial institutions embracing crypto infrastructure in response to growing demand for independent custodianship.
- ABN AMRO's collaboration with D2X for off-exchange collateral management services for trading crypto futures and options is another example of this trend, aimed at eliminating counterparty risk to the exchange by ensuring client assets remain separated from the trading venue's own holdings.
- Stablecoins, tokenization, and blockchain technology are at the heart of these partnerships and collaborations in the industry, as traditional banks and crypto exchanges work together to provide institutional-grade security, capital efficiency, and regulatory compliance, with solutions such as Binance's use of U.S. Treasuries as margin collateral for exchange trades.
