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Home Cryptocurrency

Coinbase Looks to Expand Custody Asset Offerings For Institutional Investors

by admin

August 8, 2018

in Cryptocurrency

Coinbase Reviews Custody Assets For Institutional Investors News

A shockwave rumbled through the cryptocurrency world when Coinbase announced that they would be considering three dozen coins for addition to their custody program. Any addition to Coinbase causes a surge in value for the coin in question – but there is a mistaken belief that these additions will be available for trade on the platform. Coinbase explicitly stated that this was not the case, and it is important to understand the distinction between the two asset types.

As is, Coinbase offers only four coins for trade – Bitcoin, Ethereum, Litecoin and Bitcoin Cash. They have nearly completed the infrastructure necessary to introduce Ethereum Classic (ETC) as well. Their custody asset system currently contains the same coins. The custody asset program is completely different from the exchange itself, available only to institutional investors. This grants them a safe storage place for relatively large sums of cryptocurrency.

The Difference between Custody Asset and Trading Assets

Most cryptocurrency investors will be familiar with a trading asset, even if they don’t know it by that name. Any currency that can be readily traded is a trading asset. This is the standard arrangement for most exchanges, although there are cold storage options on a handful of centralized platforms.

In contrast, custody assets are not available for trade within the exchange. While they can safely be stored, they would have to removed and transferred to another platform in order to trade. In effect, funds stored in a wallet are a custody asset – an exchange is necessary for all transfers that are not OTC. So while Coinbase is intending to add 36 coins to their custody program, it is unlikely that they will all become available on the exchange.

Upcoming Additions to Trading Assets

However, Coinbase recently stated that they were exploring the option of adding five additional coins to their trading asset portfolio. The exchange is very explicit with how and where they will be adding new coins – they’ve outlined every step of the process for adding Ethereum Classic. New assets potentially include Cardano (ADA), the Basic Attention Token (BAT), Stellar Lumens (XLM), Zcash (ZEC) and Ox (ZRX). Coinbase was careful to explain that they may ultimately not all be added, but users can expect regular updates on the decision making process.

As one the top US cryptocurrency markets, Coinbase holds an enviable position in the industry. The expansion of their offerings comes at a careful, measured rate to ensure that they remain in that position. The recent shift from GDAX to Coinbase Pro is one non-asset based decision that has helped them rebrand as a more user-friendly platform. Coinbase is often the first face of cryptocurrency for new investors – and they take that role seriously.

Article By: Adam Stone