Coinbase has been recently facing fierce competition from several cryptocurrency exchange platforms. In the last week, Robinhood, a leading Stock exchange mobile app, announced expanding its commission-free crypto trading services to more US states, while another competitor, eToro revealed opening its services to all US customers. Furthermore, Circle announced acquiring yet another exchange, Poloniex, in a massive $400 million deal. Coinbase however, seems to have planned ahead with a set of moves, which intend to enforce its leading role in the crypto realm.
GDAX to be shut down
Speaking at CNBC fast money on May 23rd, Assif Hirji, President and Chief Operating Officer of Coinbase claimed to have two major announcements.
“I am delighted to announce two things today. Things that are going to significantly increase the amount of assets people can trade on coinbase. The first is the launch of Coinbase Pro, which is an active trading product […] It’s an evolution of our GDAX platform. […] GDAX is now basically splitting in tow: the institutional suite of products we announced last week [Coinbase Prime, Ed], and Coinbase Pro for the individual investor”.
The company announced that it will shut down GDAX by June 29 and that all customers will be rolled over to Coinbase Pro.
He then added:
“Secondly, we bought Paradex which is the leading relay in the world. This will allow you to literally trade hundreds and hundreds of tokens from your own wallet. We are actually going to make that compliant with the US laws. We are greatly increasing the number of things that you can trade, we are doing it in a compliant way”.
Asked whether Paradex is a decentralized exchange and whether there will be a particular basket of tokens to be offered to trade that he can name, Hirji clarified:
“It is not a decentralized exchange; it’s not an exchange in that sense. It is a bulletin board”.
In fact, Coinbase seemingly envisions to launch a bulletin board for US customers, which they think will work the same way as in the equity markets, so to allow customers to trade assets directly.
“It will be slightly different outside, but we will get this to be compliant, and we will allow our customers to have access to it as soon as possible,” he went on to explain.
He further stated that US regulators consider exchanges “one way” and bulletin boards “another way.” And that through bulletin boards, a much broader suite of products can be offered to trade.
He concluded by saying:
“Our hope would be that most of the tokens that are already traded in Paradex, we will be able to offer in the US, in a compliant way”.
Coinbase move to target institutional investors
During the same day, Adam White, Vice President and General Manager of Coinbase, was invited to Fortune’s “Balancing the ledger.” He was asked about the addition of Zcash on Gemini less than two weeks ago, and the 47% surge in price that accompanied the event, White answered:
“From a larger industry perspective, I think the addition of Zcash is a fantastic big step forward for the industry […] because what it represents in my opinion, is that regulators are truly beginning to understand this technology”.
He further revealed that Coinbase is aware of the fact that its customers’ want to be able to trade more assets, and that they are “working towards that.”
White then spoke of Coinbase’s new office opening in Chicago, which he described as an engineering office that will work on institutional grade infrastructure for the products the company already offers, and the future ones being currently developed.
“We want to be the Google of crypto. We are spending much of our time and resources now to build up the infrastructure. The ability to safely store cryptocurrency, to safely trade it”.
Coinbase lately launched a series of products, such as Toshi, a user-controlled wallet and Dapp store, and Coinbase Commerce, another app that allows customers and businesses to transact cryptocurrency in exchange for goods and services.
Asked about how much institutional money is expected to flow into the cryptocurrencies market, White answered:
“From our estimates, there is at least $10 Billion of institutional capital that is waiting on the sidelines just to move in for a safe custodianship product. We think that the combination of offering the right product set, with the right service is going to unlock tens of billions of dollars of institutional capital, and we hope it comes through us”.
Goldman Sachs’s announcement a few weeks ago that they are going to allow their clients to trade cryptocurrencies, was regarded by many analysts as a watershed moment for the young asset class. White closed the interview by predicting that the latter will hopefully open the door, for wider institutional adoption.