Coinbase, the largest crypto exchange in the United States, announced on its blog that it is considering an expansion of its current offerings by 17 token projects, none of which are presently listed on any exchange. According to Bitcoinerx:
Only 53 of the 2880 assets listed on CoinMarketCap are available to exchanges across the Coinbase and Coinbase Pro exchanges. The blog also reinforces that all projects listed in the future must first comply with Coinbase’s comprehensive Digital Asset Framework guidelines.
The popular crypto exchange has come a long way from its humble roots back in 2012. In October of 2018, it raised $300 million, which earned it a post-money valuation in excess of $1 billion and garnered the coveted nickname of a “unicorn”. It has expanded, with expected growing pains, but it has a global footprint of nearly three-dozen brokered exchanges, serving clients in 190 countries. Last May, it announced that it had over $1 billion of institutional funds under management, and in August, it finalized its acquisition of Xapo, a leader in crypto custody solutions. Revenues in 2017 exceeded $1 billion.
Coinbase has made these strides by appealing to the retail customer base, while still courting institutional players, with a simple strategy of “fiat-to-crypto” support for a limited few crypto-currency pairs. As it expanded globally, it naturally adapted to local market conditions, offering additional pairings based on customer demand. It is now up to 53 assets, which may differ by exchange and location, most of which are outside the U.S. Regulatory authorities tend to be more restrictive in the State than elsewhere.
The firm has resisted the “pay-to-play” syndrome that drives many smaller exchanges to charge enormous fees to development programs to become a market maker for the respective digital asset token. It is not deviating from this chosen path, but it has decided to do something that is different. The 17 tokens under consideration are not yet “live”. The folks at Bitcoinerx also noted that:
Historically, Coinbase has chosen only to field listing candidates from existing projects that have already established themselves and fostered widespread support.
Per the Coinbase announcement, the company has devised a metric to guide its strategy – they intend to offer their customer base access “to at least 90% of the aggregate market cap of all digital assets in circulation.” A “metric” is one thing, but due diligence is quite another. The proposed token program must perform above a given standard, as defined by the company’s Digital Asset Framework guidelines. Three of its current choices should have no problem:
- Telegraph: The widely popular messaging platform is behind the Telegram Open Network (TON), which is “positioned as a comprehensive blockchain network for decentralized computing and file storage”. Private investors have put $1.6 billion into the venture, which hopes to launch by the end of October;
- Polkadot: This venture has focused on interoperability and security between competing platforms. It has raised $1.2 billion, but its solution is still in testing mode;
- Filecoin: This venture does not have the stellar record that the above two programs have established. It began in 2014, raised $257 million via an ICO in 2017, but it has yet to show anything for its efforts.
No reasons were cited for this sudden switch in policy direction, but it could be driven by competitive reasons. Binance has been grabbing headlines lately with its many new product and service offerings, along with opening a U.S.-based company for the sole use of its U.S. customers. Coinbase has not published a decision date for any of these future token considerations, but the firm already has a track record of delivering on its commitments.
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