Coinbase Launches OTC Trading Desk for Institutional Investors

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by Darya Rudz · 3 min read
Coinbase Launches OTC Trading Desk for Institutional Investors
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The service targets instutitional investors, but all Coinbase customers could potentially benefit from lower volatility provided by the OTC trading desk.

Coinbase, the world’s leading digital currency exchange and one of the most prominent companies in the crypto industry, is continuously coming up with new developments in order to improve its wotk and benefit its customers. The latest initiative of the company regards over-the-counter (OTC) trading which occurs directly between trading parties instead of over an exchange.

Coinbase has launched an OTC trading desk that targets institutional investors, but enables all the exchange’s  customers to benefit from lower volatility. The trading desk was designed to fight off a competition between Coinbase, Poloniex and Gemini. The competitive advantage of Coinbase is that it will not only “trade on a proprietary basis,” but also “match client orders,” which results in lower fees and lower settlement times.

Christine Sandler, head of sales at Coinbase, described the move as “opportunistic.” She commented:

“We launched our OTC business as a complement to our exchange business because we found a lot of institutions were using OTC as an on-ramp for crypto trading. We felt this was a huge benefit to our clients to actually leverage both our exchange and our OTC business.”

According to Sandler, the OTC trading desk would allow trades to settle “seamlessly and instantly” with funds available for “immediate withdrawal,” and with “no possibility of a failed trade,” and “no need to chase down wires and blockchain transfers.” She also mentioned the company’s plans to expand the service offering to include delayed settlement and integrate it with Coinbase Custody, its platform launched in July and aimed at institutional hedge funds and other big institutional investors willing to invest in the crypto space in huge sums.

Coinbase’s Stable Coin

Recently, Coinbase launched its own stable coin, USDC, which is “one of the most liquid stable coins that is trading right now,” according to Christine Sandler.

Speaking of the role of stable coins at the market, Sandler said:

“When you think about volatility you think about the complement of how do you mitigate that volatility for users of cryptocurrency. And, a stable coin absolutely does that [mitigates volatility].”

Coinbase to Make Cryptocurrency Available to Everyone

Recently, the crypto market experienced a downturn, with many currencies dropping a lot last week. But Coinbase is trying to make cryptocurrency available to everyone, regardless of market conditions.

Sandler said:

“The opportunity for us to offer and have financial services for the unbanked globally is really coming alive.”

The head of sales department at Coinbase believes that currently, there is an upside at the market:

“There is one upside to the recent volatility, that crypto has been front and center to the mainstream media, and that has driven a lot of institutions to think whether this is an opportunistic investment point.”

Sandler added that institutions may be thinking that this is a prime opportunity to enter at a lower price.

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