Coinbase Custody is Coinbase’s new baby. It was launched last month only, and it’s already been approved by SEC as a custodial service. This is not the kind of service we can use directly (the minimal amount to get an account is ten million dollars), but the people who manage your retirement fund could use it to protect your money and make sure it’s available by the time you finally need it.
The outstanding thing about SEC’s approval is that it still has no regulations in place for cryptocurrencies or institutions dealing in them, so the new custodial service must have been able to prove they could comply with all the traditional requirements through the use of digital assets. That alone is very interesting and could signal a good disposition from the SEC towards crypto coins.
A custodial service holds the wealth of all kinds for its clients, and it makes sure (in principle) that it will grow at a reasonable rate but, above all, that it will whole and available by the time it has to give it back. It seems that Coinbase Custody will achieve this goal by using a variety of cryptocurrencies as stores for wealth.
At the time we write this, the custodial service uses only the tokens that are available for trade at Coinbase, but it would seem that, given the crypto market’s volatility, they want to expand their horizons and play it safe. So in that spirit, it announced it’s studying forty different tokens to decide which ones are suitable for their purposes.
The announcement made it very clear that this has nothing to do with tradable assets. Each of the coins will be studied for use by the custodial service only which doesn’t mean at all that they will be supported for trade by Coinbase or that they will become available in any of the other company’s platforms.
It seems that this declaration of intent is becoming the new rule for Coinbase. They are announcing every new move, even from the planning stages, to guarantee transparency. There are good reasons to do this.
The listing of BitcoinCash was a bloody mess that left many users very unhappy and prompted rumors of insider trading. Also, Coinbase is going to go public soon so it’s good policy to make sure that prospective investors are happy with the company’s public relations and reputation so that they will become enthusiastic shareholders.
Some of the cryptocurrencies under consideration are no surprise at all. Cardano, Ripple, or EOS, Stellar Lumens’ XLM, for instance, are included and enjoy an outstanding reputation within the cryptosphere (Ripple’s XRP, for instance, was last year’s best performing coin). But others (kik, or steem) are more of a mystery.
Any of the coins that can finally be included by Coinbase Custody will benefit as it will be something of an endorsement and it will also create additional demand that can help with market performance. For now, just being under consideration can be a good thing.
Image Courtesy of Pixabay.
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