Why does Coinbase have custody?
Despite a bear market, Coinbase had a great 2018, filled with new product announcements like a venture capital fund, an index fund, and new trading options.
Now the company has launched Coinbase Custody, a new platform designed to offer institutional investors safe custody of digital assets.
What does that mean exactly?
Coinbase Custody was designed to provide financial controls for institutions and companies looking to trade digital currencies such as Bitcoin and Ethereum. Following the emergence of many hedge funds targeting the digital currency space, the proposal aims to provide institutions with tailored protection offerings.
- Coinbase Custody primarily aims to provide institutions with a secure way to store digital assets such as cryptocurrencies - with access to verification channels, withdrawal limits and support for multiple signers.
- The platform offers phone support for institutions wishing to confirm booking fees and other account changes, and aims to support “all major digital assets” – currently defined as the same assets that Coinbase lists in its service client, namely Bitcoin, Ethereum , Litecoin, and other ERC20 tokens.
Why is Coinbase custody important?
To date, Coinbase's most significant excursions have been aimed at mainstream consumers and early venture capitalists. With Coinbase Custody, the platform has a direct eye on financial institutions and hedge funds.
If you're wondering how institutional it is, Coinbase Custody requires a minimum balance of $10 million and charges a $100,000 setup fee on top of a 10 basis point monthly fee.
The floor? The offering is significant in that it opens a safe door for institutional investors and hedge funds to enter and operate in the cryptocurrency space. While multi-signature wallets and even device wallets could attract serious investors, the new platform aims to provide businesses, large corporations and other financial players with a secure and stable service to offer their own currencies and securely store their own. own portfolio.
What does Coinbase Custody mean in the future?
In short, a gateway for large companies to enter and compete in the cryptocurrency markets is now open, and individual investors and small businesses may no longer find the scene.
As Brian Armstrong, the company's CEO explains, “More than 100 hedge funds have been formed in the last year solely to trade digital currency. Even more traditional institutional investors are beginning to take an interest in trading assets (including family offices, sovereign funds, traditional hedge funds, and more) According to some estimates, today $10 billion in institutional money is waiting to be invested in the digital currency to be put aside.
However, for now, the platform is only open to businesses in the United States and Europe, and is set to expand into Asian markets by the end of 2018.
The platform will most likely conform to Coinbase's listing decisions and currently supports Bitcoin, Ethereum, Bitcoin Cash and Litecoin. Support for Ethereum Classic and other ERC20-based tokens is currently unclear.