Bank deposits being used as collateral for futures? Bloomberg: Binance is currently in negotiations with local Swiss banks

Unconfirmed news: Binance is reportedly in discussions with a local Swiss bank to allow some institutional users to use "bank deposits" as collateral for cryptocurrency trading, claiming it will help reduce counterparty risk in trading. At the same time, bank deposits can also be invested in traditional financial products to earn additional returns.

Binance's New Policy? Bank Deposits as Collateral

Bloomberg cited four anonymous sources revealing that Binance has been in communication with some institutional clients to allow bank deposits to be used as collateral for spot and derivative trading.

Insiders mentioned that FlowBank in Switzerland and Bank Frick in Liechtenstein are potential intermediary institutions offering this service.

No Official Response, Related Banks Lack Cryptocurrency Licenses

Binance, spokesperson, and founder CZ have not responded to this news.

Bank Frick declined to comment, citing bank secrecy laws.

FlowBank stated that their license does not cover providing cryptocurrency trading services.

Bloomberg reported that the specific arrangements of this proposal have not been finalized and may be subject to change.

Bloomberg also referenced previous discussions by Binance regarding bank deposit collateral schemes:

1. User deposits are locked via third-party agreements.

2. Binance assists in lending stablecoins to users as collateral for crypto trades.

3. Locked user deposits can be simultaneously invested in money market funds to earn returns, offsetting the borrowing interest paid by Binance for lending stablecoins.