Coinbase’s Big Announcement

On July 2, Coinbase, one of the major players in the U.S. crypto exchange and wallet arena, has officially lifted the curtain on its long-awaited digital assets custody solution tailored for institutional investors. Talk about a plot twist in the ever-evolving tale of cryptocurrency!

The Birth of Coinbase Custody

This excitement isn’t new, as Coinbase originally teased its Coinbase Custody venture back in 2017. Their mission? To tackle what they deemed the paramount concern of institutional investors—security. And with the weight of over $20 billion worth of clients’ crypto safely stowed over the past six years, they seem to know a thing or two about keeping those digital coins under lock and key.

Meeting Regulatory Requirements

What gives this service an extra layer of credibility is its compliance with the rigorous standards set by the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). By teaming up with Electronic Transaction Clearing (ETC)—an SEC-compliant, FINRA-member independent broker-dealer—they’re directly addressing the compliance fears of institutional players.

Supported Assets and Security Measures

In terms of crypto assets, Coinbase Custody is not just a fancy name; it’s already capable of securely storing a selection that includes Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). But wait, there’s more! The company plans to keep expanding its roster of supported assets and eyeing Asian institutions by year-end.

Now, onto the serious stuff—security measures. They promise a bevy of protective mechanisms like:

• On-chain segregation of crypto assets
• Offline, multi-signature, geographically distributed transaction protection
• Thorough cold storage auditing and reporting

And as if that’s not enough, they’ll eventually be rolling out secure, segregated hot wallets to add flexibility to the mix.

Exciting Future Ahead

Coinbase Custody aims not just to store crypto but also to integrate its new clients into the broader crypto ecosystem. They plan to allow institutional investors to engage in positions, such as proof of stake and distributed governance—although the specifics are still under wraps.

Coinbase’s Broader Ambitions

This launch is merely the opening act in a series of expected innovations from Coinbase, which hopes to tap into $10 billion of institutional investor funds currently sitting idle. They’re also pushing towards becoming a fully SEC-regulated broker dealer, and expanding their reach into new markets, including Japan.

However, as they charge forward, they’re not without their challenges. Recent revelations have unearthed a 134-page dossier of complaints from users, expressing concerns that Coinbase may be struggling to keep pace with its growth. Time will tell if they can address these growing pains while reaching for the stars.