San Francisco-based digital asset exchange, Coinbase has partnered with SoFi, an internet-based lending firm, in order to provide a cryptocurrency investment service.
According to CNBC, Coinbase’s management will be helping SoFi launch a platform that allows users to check crypto prices in real-time and also buy and sell coins. As explained in the announcement, the digital asset trading service will be integrated into the existing SoFi Invest platform, which was introduced this month. Although it’s not yet clear which cryptocurrency trading pairs will be listed by the SoFi platform, major cryptos such as bitcoin (BTC) and ether (ETH) will most likely be supported.
Commenting on the joint initiative, Anthony Noto, the CEO at SoFi, remarked:
Our target audience wants to see what the price of cryptocurrency is, and to buy it ... They have a desire to do that and in many cases they already are.
Noto, a former managing director at Goldman Sachs and the former chief operating officer at Twitter, joined SoFi in January 2018. Established in 2011, SoFi focuses on helping customers refinance their student loans and recently expanded its services to offer crypto-related financial products.
Coinbase Helps Fidelity Offer Similar Services
Fidelity Investments, a US-based financial services firm with over $7.2 trillion worth of assets under management (AUM), has also partnered with Coinbase - in order to allow clients to check their cryptocurrency balances. However, Fidelity does not yet provide its clients the ability to trade cryptoassets through its platform.
In late January 2019, Fidelity announced that it would be launching its own crypto custody service in March. Through its newly established subsidiary, “Fidelity Digital Assets”, the Boston-headquartered investment firm will provide clients “institutional-grade custody of digital assets.” Fidelity will also offer “trade execution” and order matching services.
Institutions Need To Know & Trust Who's Holding Their Assets
According to an official Medium blog post by Fidelity Digital Assets, the company acknowledges that "institutional clients represent a broad spectrum of financial firms, including mutual funds, investment managers, family offices, public and private retirement plans, registered investment advisers, insurance companies, corporations, endowments, and foundations.”
At present, “many of these institutions serve as stewards for their clients’ assets”, Fidelity’s blog noted. And, “these institutions must work with a custodian that can demonstrate a significant track record and experience in safeguarding client assets”, the post mentioned. Before institutional clients make substantial investments in cryptoassets, they “need to know who is holding on to — and securing — the private keys" to their digital funds, Fidelity stated.