Cryptocurrency & Blockchain Business

What Is Coinbase Custody?

Cryptocurrency companies are often looking for new ways to attract even more investment. Although not everyone is necessarily pleased with the service provided by Coinbase, the company is taking a big step toward attracting institutional investors. Its new Custody service will focus solely on institutions and won’t be accessible to mainstream consumers. This new form of digital asset custody is sure to create a lot of new opportunities over the coming years.

COINBASE CUSTODY IS A MAJOR DEVELOPMENT

It is good to see exchanges such as Coinbase acknowledge the need for services appealing to institutional investors. Right now, few institutions are even focusing on cryptocurrency in a significant manner, mainly because there is little reason to do so. Without proper solutions on their level, it is doubtful that situation will change. Coinbase Custody may very well make a positive impact in this regard, although it remains to be seen if there is a genuine demand for this service.

At its core, Coinbase Custody will serve as a digital asset custody service. The service will adhere to strict financial controls and secure storage tailored to institutional investors of all stripes. Institutions possessing an interest in Bitcoin, Ethereum, and other currencies will see the benefit of this service almost right away. Safeguarding digital assets is of great interest to a lot of institutions.

Moreover, Coinbase Custody will provide phone support to all users. Support staff will help with confirming transfers of funds and making account changes if needed. It is good to see the company deploy dedicated account representatives for this venture, as these are not regular clients the company will be dealing with. Coinbase doesn’t have the greatest reputation when it comes to customer support, but it remains to be seen how this effort will play out.

Moreover, the Coinbase Custody service will revolve around multi-user accounts with separate permissions. It is similar to the concept of multisignature wallets, but with more customization when it comes to giving certain people limited responsibilities related to managing funds. Different levels of permissions include viewing accounts, performing internal transfers, and making withdrawals.

The multi-asset support aspect is also significant. More specifically, Coinbase Custody will support Bitcoin, Ethereum, Litecoin, ERC20 tokens, and others which are yet to be announced. It will be interesting to see what users of the new service will pay the most attention to. It is evident that Bitcoin and Ethereum are on most people’s minds these days, but there is some good money to be made with other assets as well. We won’t know which “other” currencies will be supported for a while yet, but there is a good chance Bitcoin Cash will be among them.

As one would expect, the Coinbase Custody service doesn’t come cheap. There is a sign-up fee of US$100,000, and users will need to adhere to a minimum balance of US$10 million. That is quite a steep amount, but it also confirms the company has no plans to deal with anyone but institutional investors when it comes to the Custody service. That being said, this is an early access product and those numbers may change over time. Whether or not there is sufficient demand for this service remains to be seen.

Source: themerkle

Leave a Reply

News by Month

 

Scroll to top