Coinbase announced the launch of a platform called Custody earlier today. The platform aims to help institutional investors securely store digital assets.
Today, Coinbase already stores more than $9 billion of digital currencies on behalf of its customers. With Custody, they aim to attract more institutional money to their platform.
As part of the Medium post announcing the launch of Custody, Coinbase claimed that 100+ cryptocurrency hedge funds have been created in the last year alone, and that number will undoubtedly continue to rise over the coming months.
“By some estimates there is $10B of institutional money waiting on the sidelines to invest in digital currency today,” explains the Medium post.
The main thing discouraging these institutions from getting involved, according to Coinbase, is the lack of a good security system – like a digital asset custodian they can trust to store funds securely. That’s why Coinbase is launching Custody.
How Custody Works?
Custody is designed to meet the needs of institutional clients, helping these individuals meet strict financial controls while safeguarding customers’ funds. Some of the key goals of Custody include:
- Strict financial controls on all held funds, including multiple signers, audit trails, limits, etc.
- Dedicated account representatives and phone support
- SLAs on fund transfers
- A regulated digital currency custodian
- Multi-user accounts with separate permissions
- Support for a wide range of digital assets and currencies
- High levels of cybersecurity and physical security
Coinbase, which already holds billions of funds for its customers, claims it’s well positioned to launch such a product. GDAX already serves thousands of institutions as the leading cryptocurrency exchange in the United States. The company has already raised $216 million from venture capital firms and financial institutions, including the NYSE, USAA, Westpac, and others. With 200+ employees worldwide in London, New York, and San Francisco, Coinbase believes it’s in the perfect position to appeal to institutional investors.
Coinbase Custody Release Date
Coinbase has not yet released Custody, nor have they announced a date for its launch. However, they plan to gradually roll out early access to the product starting in 2018.
Institutions can reach out to Coinbase today to learn more about the platform. You can sign up to learn more here.
Alternatively, Coinbase has already launched an official website for Custody. You can view that website here: https://custody.coinbase.com/
Who Can Use Coinbase Custody?
Coinbase Custody is catered towards institutional investors who have a minimum of $10 million to deposit.
In order to utilize the service, customers would need to pay a $100,000 initial setup fee. There will also be an ongoing fee of 10 basis points per month on coins stored in the system. Pricing may change as the company rolls out early access.
The platform is exclusively for institutional investors – so even if you have more than $10 million in personal cryptocurrency funds you wish to deposit, this service does not appear to be available to individual investors.
Ultimately, Coinbase Custody is a vault-like service for institutional investors. It will help institutional investors participate in the fast-growing world of cryptocurrency. These organizations can access a secure, trusted storage solution from one of the world’s leading cryptocurrency companies.