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Major US crypto wallet provider and exchange service Coinbase has announced it is launching a suite of new products aimed at institutional investors, according to an official blog post today, May 15.
The rapid influx of world’s large financial participants and their capital spurred Coinbase to develop the products. The announcement follows company’s furious activity to maintain its position as the home for traditional financial institutions.
Adam White, General Manager at Coinbase, writes:
At Coinbase, we welcome these developments as they help accelerate the world’s adoption of cryptocurrency by bringing new capital, greater awareness, and additional infrastructure to the space. This movement requires institutional grade products and services, something Coinbase has been developing with leading institutions and which we are proud to formally launch today.
In keeping with Coinbase’s mission, White highlights its efforts to stay in line with SEC regulations for cryptocurrency trading, which has made the exchange a favorite among institutions cautious to enter the space.
Its new product, Coinbase Custody, partners Coinbase with an SEC-regulated broker-dealer for third-party auditing and financial reporting validation. The custodial producta offering maintains a high standard of reporting validation that institutional firms require in broker-dealer relationships.
Coinbase Markets, meanwhile, will be a Chicago-run electronic marketplace that provides a centralized pool of liquidity for all investors, and aims to offer settlement and clearing services in future, according to Coinbase’s announcement today. In addition, Coinbase Prime will be an separate trading platform for institutional clients.
White believes that the new opening of the office in Chicago will position the company to tap into a larger talent pool of engineers who have “deep exchange infrastructure experience.” Presumably, this is because the engineers around the area are already experienced in traditional exchange-centered products as Chicago is a hub for finance. As previously reported, the tight blockchain talent pool has led exchanges to lure engineers away from banking firms.
This product will fill a missing piece of critical infrastructure needed for institutions. Over the course of the year we intend to offer lending and margin financing products to qualified clients, high touch and low touch execution services like over-the-counter (OTC) trading and algorithmic orders, and new market data and research products.
This product launch builds on Coinbase’s previous efforts for building traditional investment types like margin trading into cryptocurrency.
These institutions can bring “new capital, greater awareness and additional infrastructure to the space,” it said. “This movement requires institutional grade products and services, something Coinbase has been developing with leading institutions and which we are proud to formally launch today.”
The company also announced that Coinbase Custody would be partnering with a U.S. Securities and Exchange Commission-regulated broker-dealer. As a result, the product combines Coinbase’s cryptocurrency security experience with third-party auditing and financial reporting validation, thus meeting the requirements of any other SEC-regulated broker dealer.
The company’s launch partners include 1confirmation, Autonomous Partners, Boost VC, MetaStable, Multicoin Capital, Polychain Capital, Scalar Capital and Walden Bridge Capital.