By
Godfrey Benjamin
April 25th, 2024
The new Coinbase Custody service will implement a range of security measures for safe and secure storage of digital assets.
On Monday, July 2, Coinbase announced through its official blog post that it has made its ‘Coinbase Custody’ service open for all institutional players and businesses. Now that the service is open, the company said that “we’ll continue on-boarding a set of world-class clients that includes leading crypto hedge funds, exchanges and ICO teams.”
As from the name it implies that the ‘Coinbase Custody’ service is basically a custodian solution for and safe and secure storage of the digital assets. The service is aimed at institutional hedge funds and other big institutional investors who are willing to invest n the crypto space in huge sums. While explaining the Coinbase Custody service, the exchange writes:
“Coinbase Custody is a combination of Coinbase’s battle-tested cold storage for crypto assets, an institutional-grade broker-dealer and its reporting services, and a comprehensive client coverage program.”
In order to implement the new digital assets custodian service, Coinbase will ‘leverage the expertise and systems’ of its partner Electronic Transaction Clearing (ETC) which is an SEC-registered broker-dealer for Coinbase Custody for now. Currently, the exchange offers its custodial services for four cryptocurrencies namely Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH). However, the exchange says that it is planning to add more digital tokens to this offering in the near future.
Moreover, the service is currently available only to institutional investors in the U.S and Europe but the exchange plans to expand it in the Asian crypto market by later this year. Currently, Coinbase holds more than $20 billion worth of digital assets for its customers and the exchange believes that after the launch of its Custody service the figure might increase with additional 10+ billion dollars.
Some of the unique features of the Coinbase Custody as reported by the exchange are:
- On-chain segregation of crypto assets
- Robust cold storage auditing and reporting
- Multiple layers of security
- Split, offline private keys that require a quorum of geographically distributed agents to use cryptographic hardware to sign transactions
In addition to offering cold-storage services, the exchange is also planning to add “secure, segregated hot wallets” along with scheduled withdrawals in order to increase flexibility for its customers. Coinbase Custody is the first service to go live, of the four institutional products launched by the exchange two months back in May 2018.
While concluding its post, Coinbase said:
“As crypto continues its maturation as an asset class and more institutions enter the space, Coinbase is committed to delivering products and services that are tailored to their unique needs. Coinbase Custody delivers the trusted storage service that our clients need to fully immerse themselves in the potential that crypto assets provide.”
After the Coinbase announcement coming yesterday, Bitcoin price jumped by nearly 5% and is currently trading at $6630, at the press time according to the data on CoinMarketCap.