On 20 August 2018, roughly three months after Coinbase announced its suite of institutional products/services, its Vice President & General Manager, Adam White, laid down the set of five core principles that will be guiding the institutional business in a post published on Coinbase's Medium blog.
White explained why these principles were so important:
"Today, we’re sharing a set of core principles that will guide our institutional business. This set of fundamental beliefs will act as our North Star as we design, develop, and operate our products. Ultimately, we intend for these core principles to drive us toward our goal of operating the most trusted venue for storing, trading, and interacting with the world of cryptocurrency."
The five principles are:
- "Operate a fair and orderly market"
- "Protect our customers with institutional-grade infrastructure and processes"
- "Enforce transparent market rules and governance"
- "Provide fair access to all market participants"
- "Publicly disclose listing practices and market rules"
The timing of the publication of these principles is quite interesting because it coincides with the day on which the Virtual Commodity Association (VCA), as covered by CryptoGlobe, announced that it has formed a working group (with Gemini, Bittrex, Bitstamp, and bitFlyer as the first four members), which, according to the VCA's press release, "will work towards the goal of establishing an industry-sponsored, self-regulatory organization (SRO) to oversee virtual commodity marketplaces."
In view of the concerns that the U.S. Securities and Exchange Commission (SEC) has expressed over the past several months regarding potential manipulation in the Bitcoin markets, it makes sense for Coinbase to reaffirm its belief in these principles to its existing institutional investors and to reassure potential new institutional investors that Coinbase is a safe place for them to trade crypto. Of course, once Coinbase becomes an SEC-regulated marketplace and/or custodian, that will make Coinbase, which already has an excellent reputation, an even more attractive destination for the billions of dollars of institutional money currently waiting at the sidelines.
Featured Image Courtesy of Coinbase