Bank of Spain’s BBVA is now reportedly acting as an independent custodian for clients of the cryptocurrency exchange Binance. This new service allows customers to better manage their assets in the exchange.
According to The Financial Times, BBVA recently started this offering, making it one of the few independent custodians working with Binance. The news surfaced from an unnamed source quoted on August 7.
There was no immediate response from either BBVA or Binance regarding inquiries from Pymnts.
This partnership emerges at a time when cryptocurrency exchanges are striving to regain investor confidence following the 2022 collapse of FTX. The report notes that with new crypto regulations enacted in the US and the EU, traditional banks are becoming more accustomed to interacting with the crypto sector.
Previously, Binance allowed clients to hold assets exclusively in Binance-related entities; however, due to customer demand, exchanges are now working with independent custodians like Sygnum and Flow Bank.
Under the arrangement with BBVA, the bank will hold trader funds as US Treasury assets while Binance utilizes these funds as margins for trading on the platform.
Sygnum recently introduced a 24/7 real-time payment network aimed at facilitating immediate transactions in both fiat and crypto without fees for transfers among participants.
This company is among those stepping in to fill the void left by the closure of Silvergate Exchange Network and Signature Bank’s Signet platform, which were vital for providing liquidity in the crypto marketplace.
A press release from Sygnum in May highlighted a sharp increase in demand for off-exchange custody services for Binance. This offering, introduced in April 2024, is intended to allow institutional traders to tap into Binance’s trading options and liquidity while keeping their assets secured in Sygnum’s custody.
Regarding BBVA, it was reported in June that the bank advised its high-net-worth clients to consider investing between 3% and 7% of their portfolios in cryptocurrencies like Bitcoin and Ether.
