Cryptocurrency exchange Binance has launched an OTC settlement solution. In practical terms, this means that by using the tool, institutional investors will be able to access trading and investment products within the Binance ecosystem, but without having to directly deposit collateral on the exchange.
“Binance Mirror,” as the new product is called, was announced last Monday (16) by Binance Custody, the exchange’s institutional digital asset custodian. According to the announcement, institutions are blocking a set amount of available asset balance through Binance Mirror into “eligible wallets,” Binance Custody’s cold storage solution.
Then, they can “mirror” that balance into their exchange account, at a 1:1 ratio. As explained by Binance, this solution promotes more security for investors:
“Your assets remain secure in your separate cold wallet as long as your mirror position remains open on the Binance Exchange, which can be liquidated at any time,” the company said.
Binance Mirror focuses on cold guarding
According to Binance, adoption and usage of Binance Mirror grew exponentially in the last quarter of 2022. The platform saw a 67% increase in these assets “mirrored” from the Binance Custody to the exchange.
In total, the assets on Binance Mirror account for over 60% of all assets currently secured on Binance Custody. This, according to the exchange, indicates an increasing institutional confidence in the off-platform solution.
“Security is a top priority for institutions, who also want the deep liquidity that the Binance exchange provides. Binance Mirror offers the best of both worlds,” said Athena Yu, Vice President of Binance Custody. Liquidity from their assets held in our refrigerated warehouses.”
Finally, the company highlighted that from now on organizations can use their mirrored assets to access a wide range of products. This includes, for example, institutional VIP loans from Binance.
About Binance Custody
Binance Custody was launched in December 2021 as a dedicated custodian platform separate from the exchange. The platform contains separate accounts and wallets that aim to address the operational and security challenges faced by institutions participating in the digital asset economy.
The launch of Binance Mirror comes against the backdrop of a loss of confidence towards centralized cryptocurrency exchanges following the collapse of FTX.