Binance, the world’s largest cryptocurrency exchange, achieved a significant milestone by finalizing the world’s first crypto tripartite agreement in partnership with an undisclosed bank. This pioneering project introduces a unique solution within the cryptocurrency space.
The solution is strategically aligned with the needs of institutional investors. Part of a series of pilot projects undertaken by Binance, the initiative directly addresses the fundamental concern of counterparty risk, providing investors with the ability to securely allocate their crypto assets.
Pushing ahead with global partnerships and institutional adoption – introducing banking triparty agreement to help institutions manage counterparty risk https://t.co/VpvP8rUDtS
— Richard Teng (@_RichardTeng) November 30, 2023
Binance’s model draws inspiration from traditional financial structures, allowing investors to optimize their collateral by securely holding assets with a trusted banking partner. Catherine Chen, Head of VIP and Institutional at Binance, emphasized the importance of addressing counterparty concerns, a persistent worry for institutional investors in the industry.
This approach, developed over a year of collaboration between cryptocurrency and traditional finance professionals, offers a solution that mirrors the trading behavior of traditional markets.
Binance to Face Heightened Regulations
Despite this innovative achievement, Binance is poised to confront significant regulatory challenges in the future. Recently, the platform reached an agreement to pay a $4.3 billion fine to U.S. regulators in a case involving alleged money laundering activities.
Changpeng Zhao (CZ), the founder and former CEO of Binance, admitted guilt in connection with these violations and is expected to face a potential 18-month prison sentence as part of the negotiated agreement with the U.S. government. Additionally, the Securities and Exchange Commission of the Philippines has intensified regulatory efforts against the exchange, alleging illegal operations in the country without the necessary licenses.
The company also announced the cessation of support for its stablecoin BUSD starting from December 15th. The platform provides users with a period to withdraw or convert their BUSD balances into other assets available on the exchange. Concurrently, they decided to introduce a new stablecoin, FDUSD, with zero trading fees, offering users a transition option. This change aims to ensure continuity and stability for Binance users.