Bitcoin Price maintained its position above $115,000 on Friday as Binance, the world’s largest Bitcoin and crypto exchange, partners with Spain’s BBVA Bank to provide third-party custody services and explores key steps towards institutional grade security.
The partnership allows Binance customers to store assets in US Treasury securities held by BBVA, Spain’s third largest bank, and the exchange accepts them as a margin of trading. This arrangement effectively separates trading activities from assets custody and provides an additional layer of security for investors involved in exchange risk.
The move comes as a $4.3 billion settlement with US regulators in 2023 continues to restructure the trust following the $4.3 billion settlement over money laundering violations. The exchange implements more stringent controls and clearer disclosures about fund management, such as allowing clients to use third-party custodians such as Sygnum and Flowbank.
BBVA is increasingly active in the Bitcoin and crypto sectors, launching crypto trading and custody services through this year’s mobile app. The bank also takes a bold attitude by advising private clients to allocate up to 7% of their portfolio to Bitcoin and Cryptocurrency, reflecting the growing institutional trust in crypto.
The custody arrangement addresses one of the main concerns that emerged following the collapse of FTX in 2022. Under the new structure, if Binance faces operational or regulatory challenges, Treasury securities under the control of the BBVA will safely insure customer funds.
This partnership represents a new standard for Bitcoin and crypto exchange security. The integration of traditional banking infrastructure with Bitcoin and crypto trading platforms could accelerate institutional adoption by providing a familiar, regulated framework.
The development is amid accelerating adoption of Bitcoin by companies, with the number of public companies holding Bitcoin on their balance sheets rising to over 200.
Market analysts suggest that the Binance and BBVA partnership can set precedents for similar arrangements between Bitcoin and Crypro exchanges and traditional banks. The move could effectively bridge the gap between traditional finance and Bitcoin and attract more institutional investors who are hesitant to enter the Bitcoin market due to custody concerns.
The volume of major Bitcoin and crypto exchanges remains stable following the news, with Bitcoin prices continuing to trade between $115,000 and $116,000. A calm response in the market suggests that as the Bitcoin and the crypto industry matures, the development of the institutions is increasingly normalised.
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