Welcome back everyone! I wanted to write something regarding the exciting news that’s been coming out about the Cryptocurrency exchange Coinbase. Now I know Coinbase has gotten a lot of criticism over the last 6 months for a variety of reasons and I think that’s fair to an extent. (I will go into why in a later article.) Today, however, I want to focus on this recent news and why I think it is so important and why it shows a promising future for Coinbase.
Coinbase, as I see it, is an invaluable part of the Cryptocurrency industry. Coinbase provides the easiest method of buying Cryptocurrency with the US dollar. They have a great User Interface and make it very easy and intuitive for Americans to get started. While they do have their issues (high fees, long transaction times, Customer Service issues), I think they provide the first step toward making Cryptocurrency less daunting and more appealing to the average person. More importantly, the news that has surfaced the last few days shows that they are taking even greater steps to bring Cryptocurrency to the masses and that excites me!
Increased Customer Support
The first bit of news that was released was that they were greatly increasing the scope and size of the Customer Service department. As someone who personally had to deal with the CS during the Bull Run of January, I cannot state how exciting and important this is for Coinbase’s success. They were greatly understaffed and could not handle the large influx of new users looking to ride the Bull Wave. For Coinbase to become popular amongst people other than the diehards, it has to work out their kinks like the Customer Service. If users can not trust the website, the average consumer will never trust them with their money or Cryptocurrency. If people refuse to use it, it limits entry into Cryptocurrency in general. Hopefully this will lead to less issues and greater trust for Coinbase moving forward!
This past week Coinbase also announced they were also releasing a Suite of Institutional Products aimed at attracting larger users, investment firms, and brokers. This is big. This is the first time we have really seen a Cryptocurrency exchange pivot from targeting average consumers to targeting Institutional firms. Yes, Coinbase will still provide their current services for the average user, but they have now greatly expanded what their exchange offers.
This suite of tools includes three new applications that are aimed at attracting the more risk adverse and conservative investment firms. Coinbase Custody is a secure Crypto storage solution to help reassure firms their money is safe. Coinbase Markets is a new team of engineers devoted to enhancing the trading of Cryptocurrency by allowing for more efficient and accurate trading decisions. Finally, Coinbase Prime is an upgraded exchange interface that finally brings Coinbase up to the standards of traditional stock brokerages in terms of Charts, Margin Trading, Market Data, etc.
Are these new tools important to you? Most likely not really, at least not at first glance. But it does affect you because attracting institutional investors is one of the next steps in widespread adoption of Cryptocurrency. The more investments, the greater the liquidity, the easier it is to obtain and trade, and then even more people join in. It’s exciting news and I hope these tools attract the Financial giants they are aimed to go after!
Meeting with Federal Regulators Regarding Banking License
The last piece of news regarding Coinbase is there recent meeting with Federal Regulators about obtaining an official banking license. Now you may ask, “Doesn’t a federal banking license go against the entire Decentralized advantages of Cryptocurrency?”. Well, yes and no. Yes, in the sense that it does add a centralized intermediary for all of your transactions and holdings. But also no, in that it does not stop you from making any transaction freely and securely. Coinbase obtaining a banking license would allow them to provide their own payment services and custody services IF you so choose.
You do not have to use it if you want to take advantage of everything Cryptocurrency offers. But it does attract more people who are not as active in their finances and do not want to control all their Private Keys and Seeds but still want to use or hold Cryptocurrency. It also allows people to leave a certain amount of Cryptocurrency in Coinbase that they can use Coinbase Payment services with to pay other people or purchase something. Again, this is important because this broadens what Cryptocurrency can provide and how it can attract different types of people.
To sum it all up, this is awesome news! Coinbase is clearly taking steps to remedy their most pressing issues as well as trying to expand into new markets. For the first time, we see a Cryptocurrency exchange making an effort to entice people other than the early adopters. We now see an exchange making a push at Institutional level investors who manage money for millions of people and therefore unlocking Cryptocurrency for millions. Coinbase is also seeking a banking license from US Regulators that would be an incredible bridge between traditional banking and the world of Cryptocurrency. The wave seems to be picking up steam and it’s an exciting time to be a fan of Cryptocurrency!
P.S. If you want to get started with Coinbase or Cryptocurrency in general, here is a nice guide to get you started!