Recently, Binance has partnered with BBVA, a Spanish bank, enabling customers to store their digital assets outside the exchange.

This collaboration is designed to enhance asset safety options. According to reports by the Financial Times, under this new arrangement, BBVA will hold client funds in US Treasury securities, which Binance can accept as collateral for trading activities. This custody model aims to mitigate counterparty risk and offer greater assurance to investors.

The integration of BBVA into Binance’s custody network follows a broader trend of the exchange adopting more traditional financial institutions. Earlier this year, Binance started allowing independent custodians such as Sygnum and FlowBank to secure assets in response to earlier criticisms regarding internal or opaque mechanisms.

Regulatory Context and Institutional Confidence

BVVA representatives did not comment on specific client relationships but noted the bank’s increasing engagement with the cryptocurrency sector. BBVA has already made bitcoin and ether trading accessible through their mobile platform and advised private banking clients to allocate up to 7% of their portfolios into digital assets.

This move towards bank-based custody highlights efforts by exchanges to strengthen trust in an industry under increased regulatory scrutiny. Binance itself faced significant penalties, amounting to USD 4.3 billion for anti-money-laundering issues and saw its CEO serve time earlier this year. Since then, the company has reintroduced some services in regions with softer regulatory stances.

Analysts suggest that involving well-established banks like BBVA can help reconcile institutional standards with the crypto ecosystem, particularly considering past incidents such as the FTX collapse.