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Coinbase Custody, the safekeeping arm of the crypto-finance giant, decided to add support for Ripple (XRP) on its institutional-aimed custodian service.
This move was first announced in October 2018 and has taken a month to seal the deal. Until then, getting a listing on Coinbase wasn’t at all easy. The exchange did listed the exclusive top five, but with the exception of Ripple that according to allegations seemed to have openly asked for getting listed among Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC) which was at the time of the listing ranked as the top 5th currency.
The initial allegations stated that Ripple Labs offered millions to Coinbase and Gemini exchange in order to get listed, but was refused despite, which was later on negated by the foundation.
Aimed at institutional investors, Custody requires a minimum cryptocurrency holding of $10 million and a thorough due-diligence process before an individual or company is accepted as a client.
The addition of XRP to the list of supported assets came as surprise to many cryptocurrency enthusiasts. In the past, XRP has generated criticism for being closely linked to Ripple, an international financial services company that is actively partnering with banks worldwide. Ripple (arguably) created the XRP digital currency several years ago. Today, Ripple (unarguably) controls the majority of XRP tokens in existence. Some argue that XRP tokens are unregistered securities because they rise and fall with the actions of Ripple. Others (including Ripple) claim XRP is sufficiently decentralized. This controversy was always in the way of XRP clearing its path to the exchanges like Coinbase.
In August 2018, a Coinbase blog post stated the firm was exploring 37 new digital assets for addition on their Custody product, with “no bearing on trading-related” verticals. Among the many assets were NEO, Steem, Dfinity, and lesser-known projects like PolkaDot, Tokencard, and Props.
Following the new announcement, in its new service, Coinbase will work as a bank for Ripple. Custodial services mean that the entity in charge has been allowed within the law to hold fund for customers.
Battle-Tested Storage for Best Crypto Assets
The launch of the custodial services at Coinbase in July 2018 opened the way for institutional investors to get involved with virtual assets.
As Coinbase explain:
“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.”
Historically, Coinbase has been pretty conservative to list new cryptocurrencies across any of its businesses. However, with increasing competition and superior products being developed in the blockchain and cryptocurrency sector, Coinbase has expanded its offerings to remain relevant. Coupled with the recently-granted New York Financial Department’s license to operate as an independent custodian, the company seems primed for disruption.
Since the infamous Bitcoin Cash saga, which saw Coinbase allegedly pumping the coin’s price before listing, the firm has maintained a clear line of communication with the general public. In statements in August 2018, Sam McInvagale, product head at Custody, stated:
“Coinbase Custody is exploring the addition of many existing and forthcoming crypto assets for storage only. We are making this announcement internally at Coinbase and to the public at the same time to remain transparent with our customers about support for future assets.”
The team at Coinbase Custody also explained to their users that they might see public-facing APIs and other signs that indicate they are conducting engineering works to support these new digital assets. This however should not be an indication of 100% commitment of adding the digital assets and they would provide updates to their customers about the process and what to expect via their Twitter page.
The addition of XRP to Coinbase Custody seems pretty unique because Coinbase does not currently list XRP on its exchange. You can store XRP in Coinbase Custody, but you can’t purchase XRP from the Coinbase exchange. Only one other asset, the OmiseGO (OMG) token, shares this characteristic.
It seems that USDC stablecoin will also hit next the guarding branch of the crypto-leading firm – according to a Coinbase post.
With the target towards institutional investors-custodian services, the project condition before a user or group/firm is welcomed as a user/client is a minimum virtual asset holding of $10 mil and a in-detail research process.
Did Coinbase Troll Ripple?
Coinbase Custody website appeares to be trolling Ripple with its XRP announcement. When announcing the addition of XRP to the Coinbase Custody service, Coinbase chose to use the logo for Ripple – which is different from the XRP logo. It’s also worth noting that the annoucement back in August listed did show the XRP logo instead of Ripples.
Coinbase has used the firm’s logo and the XRP logo at different times. Although this may seem trivial, Ripple has come under fire for its supposed control over XRP, meaning that distinctions between the two entities are a delicate subject. In any case, Coinbase has not clarified the nature of its decision, leaving the crypto community to speculate on the company’s logo choices.
Maybe it was them trolling or maybe it was an honest mistake.
Following XRP now being a supported asset on Coinbase Custody, institutions are putting a little bit more faith into Ripples cryptocurrency. XRP has been listed as one of the nine supported assets for its service.
As reported by Crypto Briefing:
“XRP is one of two assets – the other being OmiseGO (OMG) – supported by the custody solution, but which cannot currently be traded on the exchange. Coinbase Custody also opted to use the Ripple logo, rather than that of XRP. Whether this has any significance is debatable, but the ongoing PR campaign to distance the XRP token from Ripple Labs is apparently not finding traction at Coinbase.”
As of November 2018, Coinbase Custody supports nine different digital assets, including bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Litecoin (LTC), Ethereum Classic (ETC), OmiseGO (OMG), Ripple (XRP), Brave’s Basic Attention Token (BAT), and 0x (ZRX). It should be noted that in New York, it is only authorized to list BTC, BCH, ETH, LTC, and XRP.
The Head of Asia-Pacific at an investment bank, the Reserve, Nelson Ryan said that it showed a tentative initial move towards a bigger interest in XRP. Ryan said:
“The fact that Coinbase is offering to custody the asset for institutional investors before offering it on their retail platform says a lot about the real potential risks they still see that XRP may be deemed a security. At this stage, it only shows a demand for a wider suite of products and assets for investment and speculation.”
CIMB Group Reveals New Partnership With Ripple
As XRP Officially hits Coinbase custody, one of Asia’s largest banks reveals new partnership with Ripple. The fifth largest bank in the ten-nation Association of Southeast Asian Nations (ASEAN), will use Ripple’s network of banks and financial institutions to power instant cross-border payments.
According to Ripple, CIMB is one of the first banks to leverage blockchain technology in a region where payments are historically slow and efficient.
“Ripple’s blockchain-based solution has been deployed to enhance CIMB’s proprietary remittance product called SpeedSend. This service allows customers to send and receive money with direct account crediting and instant cash collection. The enhancement improves their access to cross-border remittances across the globe — both inbound into ASEAN and outbound to other countries. It is already enabling remittances to corridors such as Australia, USA, UK and Hong Kong.”
The CEO of CIMB Tengku Dato’ Sri Zafrul Aziz says Ripple’s technology will fundamentally transform how cross-border payments are made.
“This innovative blockchain solution will revolutionize international cross-border remittances, and is a testament to CIMB’s ongoing efforts to enhance its digital banking proposition by providing speedy and cost-efficient solutions to our customers across ASEAN.”