Spanish banking giant to host client assets away from the crypto venue, aiming to cut counterparty risk and meet tougher EU rules

MADRID/ZURICH — Binance is working with Spain’s BBVA on a custody arrangement that would let certain clients park assets off the exchange while continuing to trade on it, according to people briefed on the talks. The move follows a two‑year market shake‑out and mounting regulatory pressure on crypto venues to segregate client funds, bolster governance and reduce the risk of another FTX‑style collapse.

Under the plan, BBVA would provide segregated, bankruptcy‑remote custody for eligible customers — initially institutions and high‑net‑worth clients — while Binance mirrors balances for trading and settlement on the venue. In practice, assets remain at the bank or its designated sub‑custodians, with controlled release to the exchange only at the moment of trade or via a tri‑party mechanism. If finalized, the setup would give clients bank‑grade safekeeping without sacrificing market access.

The talks come as Europe’s new crypto regime takes shape. The EU’s Markets in Crypto‑Assets framework (MiCA) and related supervisory guidance stress segregation, capital and operational resilience for service providers, while national watchdogs from Madrid to Paris demand clearer lines between custody and trading. Banks, for their part, have spent the past few years building token‑asset rails — and see risk‑off investors eager to move coins and tokenized collateral into regulated vaults.

For Binance, partnering with a household‑name lender could ease licensing discussions and restore confidence among institutions that trimmed exposure during the industry’s legal and compliance troubles. For BBVA, the project would fold digital assets into a broader strategy to offer custody and on‑ramps to wealthy clients within a familiar compliance envelope. People familiar with the matter said the two sides are working through technical details such as eligible assets, wallet architecture, collateral management and how to handle corporate actions.

Off‑venue custody is not new in crypto, but a top‑tier European bank anchoring it would be a milestone. After 2022’s failures, hedge funds and treasurers sought ‘trade without transfer’ models built by specialist custodians and prime brokers, allowing capital to stay in cold storage until milliseconds before execution. A bank‑led variant could turbocharge that trend by plugging crypto into existing collateral and payments plumbing — and by giving risk committees a name they already know on the custody line.

Investors say the demand signal is clear. Proof‑of‑reserves attestation, while helpful, has not erased questions about commingling and rehypothecation. An arrangement in which a regulated bank controls keys and legal title addresses the most basic fear — losing access if an exchange halts withdrawals — and may lower capital charges for some institutions whose policies treat bank custody more favorably than self‑hosted wallets or exchange accounts.

Still, key questions remain. Will retail users get access or is this a pure institutional product? Which coins and tokenized assets are in scope at launch — bitcoin and ether only, or also stablecoins and tokenized T‑bills? How will on‑chain staking or airdrops be handled when assets sit at a bank? And how will fees be split between the exchange and the custodian? People involved cautioned that the pilot could evolve as supervisors give feedback.

The architecture being discussed resembles traditional ‘tri‑party’ collateral management. Clients would open custody accounts at BBVA with unique on‑chain addresses or omnibus wallets backed by detailed sub‑ledgering. Binance would receive read‑only visibility to balances and the right to trigger conditional movements for settlement. Between trades, assets stay immobilized at the bank. If the venue faces an outage or enforcement action, clients retain independent access to their holdings.

Legal plumbing is just as important as the tech. The parties must hard‑wire that client assets are held off the exchange’s balance sheet; define the law and forum governing disputes; and specify when, if ever, the custodian may refuse a transfer request from the venue — for instance, if sanctions screening flags a counterparty. Insurers will want clarity on key management, disaster recovery and the segregation of hot, warm and cold wallets.

For BBVA, the commercial calculus cuts both ways. Hosting crypto on behalf of a major exchange could open fee pools in safekeeping, FX, and securities‑style financing against token collateral. It could also invite supervisory scrutiny and reputational risk if counterparties misstep. Bankers say the project’s viability hinges on tight client selection and real‑time compliance tooling that mirrors the bank’s standards in traditional markets.

Spain’s supervisory mosaic adds another layer. The central bank and market regulator have stepped up oversight of crypto advertising, on‑boarding and anti‑money‑laundering controls, while the EU‑wide regime transitions in. Any cross‑border model will need to account for the location of clients, booking entities and wallets — a complexity that often pushes pilots to launch with a small, well‑defined user group before broadening.

Competitively, the tie‑up would raise the bar for rivals. Exchanges have experimented with off‑exchange settlement using independent custodians, but the optics of a Tier‑1 bank as asset guardian are different. If the BBVA model proves smoother for audits and capital treatment, other banks could follow — particularly those already running digital‑asset custody stacks. That, in turn, could accelerate the migration of institutional volume from venues that keep customer assets in‑house.

For users, the benefits will be measured in frictions removed: fewer hours moving coins across chains; lower security overhead; clearer statements for auditors; and less anxiety about counterparty risk. The trade‑off is likely cost — custody fees plus settlement charges — and slightly slower withdrawals compared with keeping everything on‑exchange. Many treasurers will accept that price for sleep‑at‑night protection.

What to watch next: regulator sign‑off; the final list of eligible assets; whether stablecoins are supported natively from day one; and whether the service expands beyond Europe. If the pilot hits its marks, a market that once told clients to ‘trust, then verify’ may finally deliver a model where trust is designed out of the loop — and verified by default.

Notes: Reported analysis based on industry briefings and public regulatory guidance as of Aug. 8, 2025. No direct quotations used.