Banking as a Service

AACB acts as the Cash Collateral Agent for clients trading on selected digital asset exchanges. With this service, AACB solves concerns around counterparty risk and asset segregation in crypto asset trading, while continuing to benefit from interest-bearing cash collateral solutions. Under a tri-party arrangement between the client, AACB, and the digital asset exchange, fiat collateral will be held secure and off exchange with AACB, a well-capitalized and reputable Tier 1 EU Credit Institution. Cash collateral of clients is held in a segregated account in the name of the client, eliminating counterparty exposure to the Crypto Exchange itself. AACB does not provide custody services for the underlying digital assets.

Binance is AACB's first, strategic tri-party exchange partner. For now, the service is available exclusively for cash collateral associated with trading activity on Binance. The service will be extended beyond a single trading venue, allowing clients to move collateral between exchanges 24/7, further enhancing operational efficiency and scalability for clients active in digital asset markets.

Collateral instructions can be submitted and processed 24 hours a day, 7 days a week, providing clients with operational flexibility that aligns with the continuous nature of digital asset markets. To support this capability, AACB offers a range of connectivity options tailored to client needs.

Benefits to Clients:

• Reduced exchange counterparty exposure through a tri-party structure
• Interest earned on eligible cash collateral deposits
• 24/7 collateral movement capabilities
• Visibility of collateral holdings through AACB's BaaS platform
• Supporting the world’s largest Crypto Currency exchange
• Expanding the support of multiple exchange relationships 

Next to the Digital Asset Cash Collateral Service, BaaS enables licensed Investment Firms that are not a bank to manage their (retail) client’s funds:

Cash Trading Account

For each client, AACB will open a Cash Trading Account (“CTA”) in the name of the client, with a power of attorney to the Investment Firm. Funds on the CTA are covered under the Dutch Deposit Guarantee Scheme (“DGS”)¹. AACB can provide Investment Firms with a range of (v)IBANs. The service is fully API-based. The CTA is a working, scalable product since 2018. The CTA can be opened for residents of Germany, Austria, the Netherlands, Belgium, France, Ireland, Spain, and Italy.

Benefits to Clients:

• Funds of individual clients in CTA accounts are covered under the DGS
• Retail client will be able to swiftly (re)gain access to their funds in case either AACB or the Investment Firm would default
• Investment Firm can more easily demonstrate adequate segregation of assets
• Retail client not exposed to default risk of Investment Firm
• Investment Firm can act like a bank, with the speed of a digital company
• Highest level of trust from the point of view of both regulator and retail client, as client onboarding adheres to bank standards
• Retail clients are incentivized to keep cash with Investment Firm, instead of withdrawing to designated account

Segregated Assets Account

In 2022, the Segregated Assets Account (in Dutch: Rekening met Afgescheiden Vermogen) was introduced as part of the Dutch Amendment Act Financial Markets 2022. This Dutch designated client bank account provides an alternative to ‘Stichting Derdengelden’ that is used by Financial Institutions without a banking license as a separate legal entity with the sole purpose to segregate the funds (money) of their clients from their own assets. The Segregated Assets Account ensures that in the event of bankruptcy the funds of clients in the account or entity cannot be claimed by creditors as part of the insolvent estate of the Financial Institution. The Segregated Assets Account is available to Payment Institutions, Payment Processing Service Providers, Electronic Money Institutions and Investment Firms. Funds held in the Segregated Assets Account are deposits that are covered under the DGS¹ on individual client level as long as the client has been identified upfront.

Benefits to Clients:

• Funds of clients in Segregated Assets Accounts are covered under the DGS
• Know Your Client/Client Due Diligence of retail client with Investment Firm
• Retail client only onboards with Investment Firm
• Closed loop can effectively be controlled and evidenced
• Investment Firm can leverage on the Segregated Assets Accounts to assure that the firm adheres to the segregation of assets rules and regulation and that their client administration is up to date
• Retail client not exposed to default risk of Investment Firm

ABN AMRO Clearing Bank holds a banking license issued by the Dutch Central Bank. Under the terms of the Financial Supervision Act, you are entitled to make a claim for compensation under the DGS, if AACB is unable to meet its financial obligations. The scheme covers your deposits with AACB up to a certain maximum value. You are eligible for compensation under the DGS, if:

• Your bank is a member of the DGS; and 
• The product in question is covered by the DGS; and 
• You are an accountholder who is eligible for compensation under the DGS 

See the information on the Deposit Guarantee Scheme on Dutch deposit guarantee | De Nederlandsche Bank

Curious to find out more on BaaS? For further information please contact Reinier van Dam