Binance, one of the leading crypto exchanges globally, has managed to maintain its dominance for many years now. Many of its best innovations have resulted in the exchange offering a wide range of features, services, and robust security measures. Among its most recent innovations is a Proof-of-KYC (Know Your Customer) token. With this token, the company is hoping to improve regulatory compliance and security while offering clients some advanced features.

To gain a better understanding of what this new Binance token does, one first has to understand what KYC policies are, as it’s become a vital process across many sectors. KYC is a process where companies or organizations verify the identity of their clients, and it is used extensively across the finance, e-commerce, and iGaming sectors. Since these institutions can only perform KY checks by processing customers’ sensitive personal information, many of their clients have grown uneasy about parting with such information, especially with how prevalent data breaches have become in the 21st century. According to crypto writer Kane Pepi, this is why services that run on blockchain technology like a no-KYC casino have begun growing so popular. In addition to greater anonymity and not requiring any sign-up process and personal information, they also provide added perks like more secure payments since they can be made with cryptocurrency.

However, despite such alternatives existing, this does not mean that KYC policies are a bad thing, especially since they are used to prevent things like international money laundering and even the funding of terrorism. The Proof-of-KYC token launched by Binance promises to make these processes more secure and efficient. Called a Binance Account Bound Token or BABT, it will achieve this by being offered to users who complete the KYC procedures Binance currently has and then serving as a virtual certificate that proves the user’s identity has been verified for other transactions too.

Since only users who’ve undergone Binance’s KYC procedures will get the coin, the token will simplify this process for users as they won’t need to keep proving their identity continuously in order to use blockchain platforms. Binance will also ensure that blockchain businesses on its network won’t get flagged for non-compliance whilst securing user data by not sharing it with any other parties than may be necessary for the service to run smoothly.

The siloed KYC approach through BABT is pegged to improve cross-platform interoperability by letting various platforms on its blockchain interact seamlessly. By using the same tool and network to verify user identities, different platforms will be able to interact with each other better. This interoperability will give users a better-interconnected ecosystem to transact in, with access to decentralized financial services like lending platforms, marketplaces, and many other DeFi services like crypto gambling and gaming platforms without the need to do numerous KYC checks first.

In addition to facilitating a seamless KYC procedure and cross-platform interoperability, Binance has also introduced robust security measures to ensure user data remains private. By leveraging blockchain’s inherent security features on BABT, Binance will be able to enable features like cryptographic protection and immutability for customers granted the BABT. Set to be a game changer, the token can sell on the promise of utility as much as value.