By
Chimamanda U. Martha
April 25th, 2024
The addition of support for ERC 20 tokens will be done across the entire range of digital asset products of Coinbase.
Coinbase – one of the world’s largest cryptocurrency exchange has recently made an official announcement of adding the support for ERC20 tokens to its suite of products. The ERC20 – Ethereum Request for Comment 20 – is a technical standard for the Ethereum token and smart contracts.
The ERC20 is an interface that anyone who wants to write a smart contract or issue a token must comply with. Coinbase notes that “ERC20 assets have become a popular way for teams to quickly build interoperable contracts/assets.”
In its official announcement, Coinbase says “We’re excited to announce our intention to support the Ethereum ERC20 technical standard for Coinbase in the coming months. This paves the way for supporting ERC20 assets across Coinbase products in the future, though we aren’t announcing support for any specific assets or features at this time.”
As said earlier, the support for ERC20 will be affected across all products of Coinbase. One of the most important products in the Coinbase custody used by institutional investors wherein the custody team is using a set of assets to support deposits and withdrawals. The addition of ERC20 tokens is expected to bring a more diverse set of cryptocurrency trusts.
While considering the addition of ERC20 support to Coinbase’s sister exchange GDAX, the company notes that “the GDAX team will wait for additional regulatory clarity before [deciding] which ERC20 assets to support on GDAX.” Not much clarification has been given in this regard by the Coinbase team, but it seems that they are currently considering to seek more guidance on the legal concerns that might emerge possibly. Moreover, no specific timeline in this regard has been mentioned for the moment.
The Coinbase exchange will continue to follow the procedural norms of adding any cryptocurrency to Coinbase only after it has been added to the GDAX exchange. After considering multiple factors, it may choose to add any ERC20 asset to Coinbase, provided it is already present on GDAX. Moreover, the addition of ERC20 support will allow for the safe recovery of customer’s ERC20 assets that have been accidentally sent to the Coinbase Ethereum address.
The company’s index fund, the Coinbase Asset Management will include any new assets on a market capitalization basis.
However, with the company’s payment processing product Coinbase Commerce, the company doesn’t wish to add any support of ERC20 for the time being.
Now with the addition of the support for ERC20 tokens, Coinbase customers must be eagerly waiting for the addition of new digital assets, however, such additions might not be possible in the near time soon. Dan Romeo, Coinbase general manager has recently stated that even though the exchange is willing to add many new cryptocurrencies to the platform, it prefers to take cautious decisions for the moment owing to regulatory situations currently in the U.S.
Romeo said that “The reality of the regulatory situation keeps us from going and doing that right away. If the regulatory environment gets clearer, I think you will see Coinbase adding many new assets to our platform.”
Unlike the previous announcements, this announcement from Coinbase has not got any significant fluctuations in the crypto market and most cryptocurrencies were seen trading almost flat throughout the day.