Coinbase Ready To Excel: 3 Massive Developments
Coinbase, one of the world’s largest exchanges, has blown up in the news over the past week due to many developments being announced. Such developments include a venture fund for crypto startups, withdrawal support for more Bitcoin forks, and entering talks with the SEC to become an officially licensed broker.
SUPPORT FOR MORE BITCOIN FORKS
Coinbase has just announced that they are planning on adding support for upcoming Bitcoin hard forks. For the time being, this support is expected to only take form in withdrawals of these Bitcoin hard fork currencies.The exact date of this support was not noted but is expected in the upcoming months.
Coinbase noted in their Medium post that, in accordance with their new process for adding new assets to their exchange, they announced this internally and publicly at the same time. This was a wise move as Coinbase has been working on creating a better image for itself in the eyes of the public.
The team at Coinbase wants to make sure that debacles do not occur again, like what was seen in early December of last year with Bitcoin Cash.
A quick refresher – just before Bitcoin Cash was released for trading on Coinbase/GDAX, there was an unexpected ramp up in volume in the trading of Bitcoin Cash. This led some to believe that there was insider news being thrown around in circles within the cryptocurrency community. Coinbase responded by forbidding employees from trading Bitcoin Cash for several weeks as well as launching an internal investigation. However, it still left the exchange with a black eye.
On the topic of these forks, Coinbase did not mention the exact Bitcoin forks that will be supported for withdrawal by the exchange. Each different Bitcoin fork has different claiming methods and alternative wallets so the exchange may only be able to support forks which are easy for large-scale support due to the millions of customers Coinbase has.
In addition to Coinbase support, GDAX fork support is also being worked on. However, Coinbase reiterates that they will only be supporting withdrawals of these forks, unless otherwise noted.
VENTURE FUND FOR CRYPTOCURRENCY STARTUPS
In a move that wasn’t seen coming, Coinbase has announced a fund for blockchain and cryptocurrency startups that are in early phases of development. On Thursday, along with the announcement of withdrawal support for Bitcoin forks, Coinbase’s Emilie Choi wrote a Medium article highlighting the proposed Coinbase Ventures.
Coinbase hopes to help promote and support promising blockchain and cryptocurrency startups which will help to disrupt traditional markets while still helping the space grow and mature. This support will come in the form of funding for these startups, and the exchange is encouraging their own employees to think in an entrepreneurial manner.
In another surprising move, the article also noted how the venture fund will not be afraid to invest into startups which may compete with their own platform. Choi writes:
You may also see us invest in companies that ostensibly look competitive with Coinbase. There may be nuance to the way these startups are building out their products. Or, in some cases, we may be comfortable investing in companies that are potentially competitive, because it’s in everyone’s interest to see the ecosystem innovate. We’re taking a long term view of the space, and we believe that multiple approaches are healthy and good.
Competition is always important in maintaining an ever growing and diversifying economy, and it often produces the best results in an industry. Some argue that the rivalry between Apple and Microsoft helped push both companies to succeed.
Coinbase also hopes that investments into other companies in the space will help in minimizing the amount of volatility in the crypto sphere. Volatility has been found as one of the main reasons why retail investors will not invest in the space, which means a lower volatility factor will entice more retail investors to dip their feet into the cryptocurrency market.
With this newly announced fund, Coinbase hopes to help propel and expand the blockchain and cryptocurrency space into a new era of innovation and healthy competition.
IN DISCUSSION WITH U.S. REGULATORS
Over the past few weeks, Coinbase has begun discussion with the Securities and Exchange Commission about the potential of becoming registered as an officially licensed broker.
If Coinbase receives SEC approval, they will be able to support a vast variety of assets which were previously off-limits, especially tokens that the SEC considers securities. The U.S. government’s issues with coming up with clear regulatory legislation concerning cryptocurrency and ICOs has likely been a reason why Coinbase has been hesitant to list new assets on the platform.
Being licensed by the SEC will likely put pressure on other U.S.-based exchanges to follow suit. While there are some definite benefits to being licensed by the SEC, there are some drawbacks as well.
If Coinbase becomes licensed by the SEC, this will mean that they can and may become the target for more government scrutiny. The exchange will now be legally required to give up information and records in order to keep their license. For better or for worse, the government could have a much higher level of access to information on cryptocurrency trades and their respective traders in the near future.
All this aside, it is clear to see that the exchange is having a busy week as it seeks to expand and evolve.