Binance Launches Gold- and Silver-Backed TradeFi Perpetual Futures Contracts
Binance is expanding its reach beyond cryptocurrencies by launching perpetual futures contracts on traditional assets (TradFi) backed by gold and silver. This product, regulated by the Abu Dhabi Financial Authority, is considered another expansion of Binance's derivatives offering.
With this launch, Binance allows traders to speculate on the price volatility of gold and silver without having to hold the physical metals. All contracts are settled in the stablecoin Tether (USDT), and there is no expiration date, allowing long-term holding. This follows the characteristics of cryptocurrency derivatives, which allow trading even on weekends and during market closing hours.
User-friendly structure for cryptocurrency derivatives trading
These perpetual futures contracts are structured similarly to existing Binance cryptocurrency futures, with features such as leverage, hedging, and 24-hour trading. This allows cryptocurrency users to easily access gold and silver futures without the need for additional training.
Trading, like traditional cryptocurrency futures, operates 24 hours a day, leveraging a variety of price data sources to reflect real-time market prices. The structure allows trading even during traditional market hours, and smoothing techniques are applied to minimize price distortion.
With this product, Binance is further strengthening its concept of being a "digital platform for investing in traditional assets without physical assets." Indeed, safe haven assets like gold and silver are widely used as risk hedging tools and could serve as a source of new capital inflows.
Regulatory-based operations, securing market trust
This product is being launched through Nest Exchange Limited, a subsidiary of Binance, and is officially licensed by the Abu Dhabi Global Market (ADGM) and the United Arab Emirates Financial Services Regulatory Authority (FSRA). Binance emphasized that it is the first global digital asset platform to secure full licenses from ADGM.
This move allows Binance to offer gold and silver-backed futures in a regulated environment, and also signals future expansion into other traditional asset classes.
Differences from other exchanges
Currently, few exchanges offer "perpetual futures" based on traditional assets. Most exchanges focus on cryptocurrencies or offer traditional futures with fixed expiration dates for physical assets like gold and oil.
For example, Coinbase offers regulated cryptocurrency futures and commodity futures, but these contracts have fixed expiration dates and do not offer 24/7 trading. In contrast, Binance has established a unique position by combining a digital-based perpetual contract structure with a regulatory framework.
A bridge between traditional and cryptocurrency markets
The digital perpetual contracts for gold and silver are significant in that they provide traditional financial institutions and institutional investors with 24-hour investment access, something previously unavailable on exchanges like the Chicago Mercantile Exchange (CME). Beyond simply offering investment options, they are seen as part of Binance's strategy to expand its cryptocurrency infrastructure into traditional financial services.
This initiative demonstrates Binance's evolution beyond a simple cryptocurrency exchange into a "Crypto-TradFi integrated platform." The process of incorporating diverse asset classes into the cryptocurrency trading environment is expected to serve as a valuable example for both market participants and regulators.
💡 “Gold and silver are now digital… Are you ready for an era of investing without physical assets?”
Binance is blurring the lines between traditional finance and cryptocurrency by launching perpetual futures contracts backed by gold and silver. Settled in Tether (USDT) and available for trading on weekends and during market hours, this product represents a significant step forward, ushering in an era of safe-haven investment without the need for physical assets.
However, with a diverse range of products being digitized, including not only gold and silver, but also BTC, ETH, DeFi, and options, the key is the ability to accurately understand the "transaction structure and risk management."
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🔎 Market Interpretation
Binance is expanding its reach beyond its cryptocurrency-centric platform to include traditional financial assets by launching perpetual futures products based on gold and silver. This effort is seen as an attempt to significantly increase market flexibility by blurring the lines between digital assets and traditional finance (TradFi).
💡 Strategy Points
1. Expanding the user base by naturally inducing existing cryptocurrency users to trade traditional assets.
2. Launching products under ADGM regulations creates a foundation for attracting institutional investors.
3. Digital infrastructure provides 24-hour trading and liquidity, something traditional markets cannot provide.
📘 Glossary
Perpetual futures: These are futures contracts that can be maintained without an expiration date. They are often used in the coin market and allow positions to be balanced through funding fees.
TradFi: refers to traditional finance, encompassing existing financial systems such as banking and securities.
ADGM: Abu Dhabi Global Market, an international financial hub with stringent regulatory requirements, is advantageous for securing trust.
💡 Frequently Asked Questions (FAQ)
Q.
Are Binance Gold and Silver Perpetual Futures Suitable for Investors?
This product is ideal for cryptocurrency traders interested in safe-haven assets like gold and silver, or for investors interested in both markets. It offers excellent accessibility, allowing you to trade traditional assets using your existing cryptocurrency account without the need for a separate brokerage account. It also serves as a useful hedging tool, making it ideal for those seeking portfolio diversification.
Q.
Are gold and silver perpetual futures contracts actually owning gold or silver?
No. This product is a derivative that does not actually hold the physical metals; it simply bets on the price movements of gold and silver. Prices are based on global market prices, and profits or losses are settled in USDT. Its unique feature is that it allows investment without physical delivery.
Q.
If Binance products are regulated, will traditional financial institutions have easy access to them?
Yes. With a structure accredited by the Abu Dhabi Global Market (ADGM) and the FSRA, it meets the regulatory requirements of existing institutional investors and is designed to enable financial institutions to safely access traditional assets on a crypto platform. This could also be a significant stepping stone for Binance's expansion of its B2B and institutional strategies.
TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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