Binance Introduces Groundbreaking Triparty Solution

In a groundbreaking move, Binance, the world's largest cryptocurrency exchange, has successfully executed the world's first cryptocurrency triparty arrangement in collaboration with a third-party banking partner.

Pilot Projects Unveiled to Tackle Counterparty Risk

This triparty arrangement is part of Binance's series of pilot projects, solidifying its position as the first cryptocurrency exchange to provide such a solution. The initiative directly addresses the persistent concern of counterparty risk among institutional investors, introducing a framework reminiscent of traditional financial markets.

Optimizing Investments: A Paradigm Shift

The solution enables institutional investors to securely store their trading collateral off-exchange, leveraging what Binance terms a "trusted bank." Notably, it allows investors to allocate their crypto assets based on their risk tolerance levels. The collateral, held in fiat equivalents like Treasury Bills, adds the advantage of being a yielding asset.

Catherine Chen Addresses Institutional Concerns

Catherine Chen, the Head of VIP and Institutional at Binance, emphasized the long-standing concerns of institutional investors regarding counterparty risk. Chen stated, "Counterparty risk has long been a concern of institutional investors across the industry."

According to the November 30 announcement, the solution ensures institutional clients can optimize their collateral and cryptocurrency investments, drawing inspiration from established trading practices in traditional markets.

End of BUSD Stablecoin Support: Changes Ahead

On a different note, Binance recently announced the discontinuation of support for its BUSD stablecoin, effective December 15th. This decision follows the gradual phasing out of BUSD support, as announced in August.

Smooth Transition Assured for BUSD Users

Users will have the opportunity to redeem their BUSD holdings until February 2024. Binance assured users that BUSD will maintain a 1:1 backing with the U.S. dollar despite discontinuation on the exchange. Paxos, the issuer of BUSD, has also confirmed continued support for stablecoin redemption until at least February 2024.

Binance encourages users to withdraw or convert BUSD assets into other available assets before December 15th, 2023, to facilitate a smooth transition. Users can opt for FDUSD, a new stablecoin with zero trading fees, or convert BUSD balances to FDUSD through Binance Convert at a 1:1 conversion rate with zero fees.

Important Dates for BUSD Holders

Starting from December 31st, BUSD withdrawals will be disabled. Remaining BUSD balances will be automatically converted to FDUSD at a 1:1 conversion rate. Users can still deposit BUSD into Binance, manually converting to FDUSD at a 1:1 rate until further notice.

Binance plans a separate announcement once the collateral conversion of Binance-Peg BUSD to FDUSD is completed.