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Binance launches pilot program for bank custody of collateral

Binance launched a pilot program that allows banks to store trading collateral off-exchange, according to a Nov. 30 announcement. Binance claimed that the program would help reduce counterparty risk.

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Binance launched a pilot program that allows banks to store trading collateral off-exchange, according to a Nov. 30 announcement. Binance claimed that the program would help reduce counterparty risk.

According to the announcement, the program allows institutions to hold collateral at a third-party bank instead of depositing it on the exchange. This “replicates a framework common in traditional financial markets, which enables investors to proportion their crypto-asset allocation based on their risk tolerance,” the announcement stated. Collateral can be held in the form of cash or Treasury bonds, allowing institutions to earn yields while they trade.

Counterparty risk is defined as “the likelihood or probability that one of those involved in a transaction might default on its contractual obligation,” according to Investopedia. In the context of centralized exchanges, it refers to traders generally needing to deposit their crypto or cash on the exchange before trading. This means that if the exchange goes offline or halts withdrawals, traders could lose their assets. In its announcement, Binance claimed that this new pilot program will help to alleviate institutions’ concerns about these risks.

Binance isn’t the only exchange that has sought to solve this problem. On Nov. 28, crypto exchange Deribit teamed up with MPC wallet provider Fireblocks to create a cryptographic system that also allows traders to perform swaps without depositing on the exchange.

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7-Eleven South Korea to accept CBDC payments in national pilot program

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7-Eleven is set to participate in the testing phase of a central bank digital currency (CBDC) initiative, running from April to June. The retail giant’s involvement highlights the growing push for digital currency integration in everyday transactions.

The pilot program will assess the feasibility of CBDC payments at 7-Eleven stores, allowing customers to make purchases using the digital currency. The initiative is part of a broader effort to explore the real-world application of CBDCs in retail environments, potentially shaping future payment systems.

As central banks worldwide accelerate their digital currency research, private sector collaboration is seen as crucial for widespread adoption. If successful, 7-Eleven’s participation could pave the way for broader CBDC usage across retail and commercial sectors.

The outcome of the testing phase will provide valuable insights into consumer adoption, transaction efficiency, and potential regulatory considerations, influencing how CBDCs are integrated into mainstream financial systems.

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SEC and Gemini ask to pause lawsuit to explore ‘potential resolution’

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The U.S. Securities and Exchange Commission (SEC) and crypto exchange Gemini have agreed to pause legal proceedings as both sides explore a potential resolution to their ongoing lawsuit. The move signals a possible settlement in the high-profile case, which centers around Gemini’s now-defunct Earn program.

The SEC initially sued Gemini, alleging that the Earn program—designed to offer users yield on crypto deposits—operated as an unregistered securities offering. Gemini has pushed back against the claims, arguing that its operations complied with regulatory standards.

By pausing litigation, both parties may be looking for a compromise that could set a precedent for crypto lending products in the U.S. A settlement could also provide regulatory clarity for similar platforms navigating SEC scrutiny.

While the outcome remains uncertain, the crypto industry is closely watching the case, as its resolution could impact future enforcement actions and the broader regulatory approach toward digital asset lending services.

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GameStop finishes $1.5B raise to add Bitcoin to its balance sheet

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GameStop has successfully completed a debt offering, raising capital that may be used to acquire Bitcoin, signaling the company’s deeper foray into digital assets. The move aligns with its broader strategy to diversify beyond traditional retail operations and into emerging financial technologies.

While GameStop has not confirmed the exact allocation of the funds, market speculation suggests that a portion could be used to buy Bitcoin, following in the footsteps of companies like MicroStrategy. The potential investment would reinforce GameStop’s ongoing pivot toward blockchain and digital assets, an effort that began with its NFT marketplace and crypto-related initiatives.

Analysts see this development as part of a growing trend of corporations exploring Bitcoin as a reserve asset amid concerns over inflation and monetary policy. If GameStop proceeds with the acquisition, it could further validate Bitcoin’s role as a strategic investment for publicly traded companies.

The company’s board will ultimately decide how the newly raised capital is deployed. Investors and the broader crypto market are watching closely for any official announcements regarding GameStop’s Bitcoin strategy.

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