Coinbase to Take Control of Certain Users’ Bitcoin Wallets
Cryptocurrency platform Coinbase has released “Custody”, a service that promises “custodian-level features” including stricter financial controls and separate access permissions. It’s aimed at institutions looking to store $10 million USD or more in digital currency on the platform.
Coinbase Expands Focus to Institutional Investors
With over $9 billion in digital assets currently being stored for retail investors, Coinbase is looking to expand its user base and help institutional investors. These include family offices, wealth funds, and traditional hedge funds get on board with digital assets by offering custodial services starting in 2018.
Per Coinbase CEO Brian Armstrong, the number one thing preventing institutions getting started with digital assets is the ability to find a true digital asset custodian who can be trusted to store client funds securely.
This is where Coinbase Custody, the company’s newest offering, comes into play. Institutions will be able to have multiple signers, audit trails, withdraw limits, as well as dedicated account representatives all while having access to the same easy to use Coinbase interface that retail investors have grown to love.
That’s not to say it comes cheap, or is for everyone. Institutions must maintain a minimum balance of $10 million USD to be eligible, and have to pay a $100,000 startup fee/10 basis points fee per month for all assets under management.
The good news doesn’t only apply to institutions, though. Part of this announcement mentioned support for additional digital assets, such as ERC-20 tokens, outside of Coinbase’s current BTC, ETH, LTC offering — a new service that will surely be available to all Coinbase customers.
A sign of things to come?
As the cryptocurrency ecosystem continues to evolve and solutions become more available and user-friendly, Coinbase and other providers will begin to focus on a large number of institutional investors. These are organizations who have been sitting on the sidelines, waiting to invest in digital assets with a full-time custodian that meets regulatory needs.
Retail investors who rely on the current solutions offered by Coinbase should be thrilled at the potential this brings for the overall market. However it remains to be seen if Coinbase can still provide top-level solutions for its retail customers as well as remain transparent on its recent legal battle with the IRS.
Do you think Coinbase will expand beyond BTC, ETH, and LTC in 2018? If so, what coins do you think will be added?
Images via Pixabay, Coinbase