Charles H. Miller
Coinbase claims it is already storing more than $9 billion of digital currency on behalf of its customers. Like that’s not enough, it has recently announced a new product built specifically for institutional investors.
Called Coinbase Custody, the service is touted as the “next step to accelerating the world’s adoption of digital currencies.” It aims to “dramatically accelerate the flow of institutional money into digital currencies over the coming years.”
Sounds like a bold plan, doesn’t it? Here are 5 things you should know about Coinbase Custody…
1. Coinbase Custody is made to meet the needs of institutional clients
The product has all the features this specific clientele requires, including:
- Strict financial controls (multiple signers, audit trails, limits, etc)
- Dedicated account representatives and phone support
- SLAs on funds transfers
- A regulated digital currency custodian
- Multi-user accounts with separate permissions
- Support for a wide range of digital assets and currencies
- Insurance (in some cases)
- And high levels of cyber and physical security
In a way, the new offering builds on Coinbase’s GDAX product which is currently used to serve big clients.
2. Coinbase Custody could help bring more big players to the market
In the past year, more than 100 hedge funds have been created exclusively to trade digital currency. Moreover, an even greater number of traditional institutional investors are starting to look at trading digital assets (including family offices, sovereign wealth funds, traditional hedge funds, and more). By some estimates there is $10 billion of institutional money waiting on the sidelines to invest in digital currency today.
With Custody, Coinbase could bring these organizations to the table, helping push the entire cryptocurrency space to the new level. As an individual investor, this could translate into bigger returns to you. And that’s why this is an important service… and why we care about it.
3. Coinbase Custody is not available to retail customers
It requires a minimum of $10 million in deposits, so if you’re not in that group — you should keep using Coinbase, or some other cryptocurrency exchange.
4. Coinbase Custody comes with a setup fee of $100,000 USD
In addition, there will be a fee of 10 basis points per month on assets stored, though the pricing could change at some point in the future.
Yet again, retail customers are best off using the “regular” Coinbase.
5. Coinbase Custody will be available in 2018
It is still not available and at the moment, Coinbase is inviting interested parties to sign-up for early access.
If you are an institution looking for the best custody solution for digital currencies, Coinbase would love to speak with you. So do check ’em out and help move the entire market forward.
For what it matters, the company has raised $216M from venture capital firms and financial institutions like the NYSE/ICE, USAA, BBVA, Westpac, and MUFG. Also, Coinbase has around 200 employees spread across three offices in New York, London, and San Francisco.
