Coinbase Assures Institutional Investors That It’s Got ‘Core Principles’

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

Coinbase Commerce Now Lets Merchants Accept USD Coin (USDC)

On Monday (May 20), Coinbase announced that "Coinbase Commerce", which provides non-custodial cryptocurrency payment solutions, now allows businesses to accept fully dollar-collateralized stablecoin USDC.

History of USDC

As CryptoGlobe reported on 26 September 2018, "USDC Coin" (USDC for short) was launched on that day by Goldman-funded FinTech startup Circle Internet Financial (better known as "Circle"). This is a regulated fully-collateralized dollar-backed stablecoin that was originally announced on 16 May 2018. USDC is based on an open source fiat stablecoin framework developed and governed by the CENTRE project.

Circle said at the time that the problems with existing fiat-backed solutions (such as Tether's USDT) were that they "have lacked financial and operational transparency, have operated in unregulated jurisdictions with unknown banking and audit partners, and have been built as closed-loop ecosystems and closed proprietary technologies."

In contrast, Circle's USDC stablecoin deals with these issues by "providing detailed financial and operational transparency" and "operating within the regulated framework of US money transmission laws, reinforced by established banking partners and auditors." USDC tokens are ERC-20 compatible (meaning that they run on the Ethereum blockchain); they are minted, issued, and burnt/redeemed based on network rules defined by CENTRE. 

Coinbase's Previous Involvement With USDC

On 23 October 2018, Circle announced that Coinbase (another member of the CENTRE consortium) was making USDC available to its customers on Coinbase Consumer and Coinbase Pro, and that customers could "tokenize dollars into USDC and redeem USDC into dollars through both Circle and Coinbase."

Then, on May 14, Coinbase said via a blog post titled "Expanding USDC crypto trading globally" that:

  • It was making USDC trading available on Coinbase Consumer and Coinbase Pro in 85 countries.

  • It was doing this to help "accelerate the global adoption of crypto trading" and to provide wider access to "a stable store of value."

  • There are more than 300 million USDC tokens currently in circulation today, and that USDC is supported by 100+ ecosystem partners.

  • Stablecoins "have the potential to materially improve the lives of people in countries where inflation is eroding wealth." 

  • Coinbase serves customers in 103 jurisdictions.

Coinbase Commerce and USDC

Coinbase Commerce was launched on 14 February 2018. Coinbase described Coinbase Commerce as a new service that "enables merchants to accept multiple cryptocurrencies directly into a user-controlled wallet," and that in contrast to its previous merchant products, it was "not a hosted service, so merchants have full control of their own digital currency." Four cryptocurrencies were supported back then: Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), and Litecoin (LTC).

Coinbase Commerce can be "directly integrated into a merchant’s checkout flow or added as a payment option on an e-commerce platform." Initially, the only e-commerce platform supported was Shopify, but on 6 August 2018, support for WooCommerce was added.

Yesterday's blog post said that now Coinbase Commerce has added support for stablecoin USDC, thereby allowing "businesses to accept payments online in the same way they’re able to accept cash in-store." 

Here are a few things to note about Coinbase Commerce:

  • "Coinbase Commerce doesn’t charge any fees to process payments."
  • "Coinbase Commerce accounts are completely separate from Coinbase accounts."
  • "You can use the withdraw functionality to send cryptocurrency to an address associated with your Coinbase account."

Featured Image Credit: Photo via Pexels.com