Binance has launched a pilot program that enables banks to store trading collateral off-exchange, which the company claims will reduce counterparty risk. Institutions can hold collateral at a third-party bank instead of depositing it to the exchange, allowing them to earn yield while they trade. Binance executive Catherine Chen stated that the exchange has been developing the program for over a year and plans to expand it further in the future. The program replicates a framework common in traditional financial markets, enabling investors to proportion their crypto-asset allocation based on their risk tolerance.