Under this partnership, user assets will be held in US Treasurys at BBVA, and Binance will accept them as trading margin. This reduces counterparty risk and appeals more to institutions wary of past collapses like FTX. This development also suggests that there is a broader industry shift toward collaboration between traditional finance and crypto, with Binance also working with Swiss banks like Sygnum.
Meanwhile, Standard Chartered’s Hong Kong arm joined forces with Animoca Brands to launch a Hong Kong dollar-backed stablecoin through their new joint venture, Anchorpoint Financial. This initiative was launched under Hong Kong’s new regulatory framework, and intensified the race to issue compliant stablecoins in the region.
Binance Teams Up With BBVA
Binance partnered with BBVA, one of Spain’s largest banks, to provide independent custody services for its customer funds. One of the main goals of this move is to restore trust in centralized crypto exchanges after past scandals.
According to a Financial Times report citing unnamed sources, this collaboration will allow Binance users to store their assets with BBVA, where the funds will be held in US Treasurys. Binance will then accept these assets as margin for trading on its platform. This arrangement is intended to reduce counterparty risk and offer a safer and more regulated custody solution, which is particularly appealing to institutional investors who are wary of the risks that were brought to light by previous crypto exchange collapses.
This step also means that there is a shift towards increased collaboration between traditional finance and the crypto industry. Binance’s decision to bring in traditional banks like BBVA, as well as Swiss institutions like Sygnum and FlowBank, for independent custody represents an evolution in how centralized exchanges manage customer assets. Previously, Binance users had to rely solely on the exchange itself for storing digital assets. By introducing bank-backed custody, Binance is reinforcing a higher standard of fund security that could help bridge the gap between conventional finance and the crypto space.
The initiative also comes on the heels of new developments improving user experience in Europe. On Thursday, Binance launched a new service allowing crypto-to-fiat conversions and withdrawals directly to Mastercard. This offers almost real-time processing for users in the European Economic Area and the United Kingdom. These moves suggest Binance is positioning itself to comply more closely with regulatory expectations and to cater to a more risk-conscious user base.
(Source: Binance)
This shift in custody standards follows the damage that was done by the collapse of FTX in 2022, which saw users unable to access funds, including $175 million from Genesis Trading. More recently, Indian exchange WazirX froze withdrawals for its 16 million users due to a security breach, which caused even more concerns.
Binance believes in the importance of accountability and secure fund management. Overall, past incidents continue to shape the crypto industry’s path toward greater transparency and security, with Binance’s partnership with BBVA being a huge stem in the right direction.
Standard Chartered Joins HK Stablecoin Race
In other international crypto news, Standard Chartered’s Hong Kong subsidiary partnered with Web3 firm Animoca Brands to jointly develop a stablecoin backed by the Hong Kong dollar. The two companies established a new entity called Anchorpoint Financial Limited, which has already expressed formal interest in obtaining a stablecoin issuer license from the Hong Kong Monetary Authority (HKMA).
This move is part of Hong Kong’s newly introduced stablecoin regulatory framework, which is currently undergoing a six-month transitional period. The framework includes stricter-than-expected requirements that initially triggered a sell-off in the stocks of local companies with exposure to the stablecoin sector, with some shares falling by as much as 20%. However, market experts described the downturn as a healthy correction.
While the official license application is new, the collaboration between Standard Chartered and Animoca Brands dates back to mid-February when they first revealed plans to launch a Hong Kong dollar-backed stablecoin. The partnership deepened over time, with the two firms, along with Hong Kong Telecommunications, participating in the HKMA’s stablecoin issuer sandbox initiative as of late July 2024.
Standard Chartered’s involvement is particularly interesting when considering that it is one of only three banks authorized to issue the Hong Kong dollar under the HKMA’s supervision, alongside HSBC and Bank of China (Hong Kong).
The race to launch a Hong Kong dollar-pegged stablecoin is intensifying thanks to growing regulatory clarity. Other major players have entered the arena, including JD.com, which recently registered entities related to stablecoin issuance, and Ant International, the Singapore-based arm of Ant Group, which is also reportedly preparing to seek stablecoin licenses in both Hong Kong and Singapore. JD Technology Group’s local subsidiary, Jingdong Coinlink, already announced its plans for a 1:1 Hong Kong dollar-backed stablecoin in late July.
With institutional players like Standard Chartered now officially in the mix, the competition to dominate Hong Kong’s stablecoin market is really heating up.
