Lastly, the launch of the new Coinbase Institutional Coverage Group will see the platform launch a new service that will deliver sales trading, research, market operations, and client services support to institutional clients.
Coinbase is also making a huge investment in Chicago for the creation of a new engineering office there. The list of partners so far includes names such as Boost VC and Walden Bridge Capital.
According to a report in the Wall Street Journal, Adam White, the General Manager at Coinbase, told them in an interview that Coinbase would ensure that HFT firms would not receive any unfair advantages: "We are going to be thoughtful and deliberate in the way we do that, to make sure we don't disadvantage any market participant over another". It will have security and third party auditing and financial reporting validation at the standards of the American SEC.
Citing the plans of over 100 hedge funds that have revealed plans to trade in cryptocurrencies in the past few months alone, Coinbase says that a shift in the market has prompted a growing need to cater for high-end clients and institutions interested in the emerging investment opportunities cryptocurrency offers. And based on what Coinbase has just announced, Coinbase Custody should be a pretty good answer to this problem. Over the course of the year we intend to offer lending and margin financing products to qualified clients, high touch and low touch execution services like over-the-counter (OTC) trading and algorithmic orders, and new market data and research products. Additionally, Coinbase feels that these products will help increase awareness and adoption by mainstream investors in the cryptocurrency market.
While Coinbase has said it doesn't consider tokens on its exchanges to be securities, the regulatory view on that is hazy. "We will also introduce platform improvements like multi-user permissions and whitelisted withdrawal addresses".
Coinbase Prime is a new set of services which Coinbase says will "fill a missing piece of critical infrastructure needed for institutions" that wish to add cryptocurrencies to the roster. To learn more or sign up as an institution, please visit Coinbase Prime.
Most of these products will be for institutional investors although some of them will also be made available to all. The custodial services will enable users to store large amounts of digital currencies whereas the enhanced trading capabilities including margin trading and risk management will allow the customers to use borrowed money.
Another new product will be Coinbase Prime, which was created to offer the tools that the institutional investors need the most when trading and fill the gap that sometimes prevents these institutions from investing in crypto. White says the group will operate from the company's office in New York City.