Coinbase is the world’s largest Bitcoin broker where customers can buy bitcoin with a connected bank account, SEPA transfer, Interac Online, and many more payment methods.
They announced in Medium blog that they will start to support Ethereum based ERC20 tokens in the coming months.
Coinbase announcements have caused huge price swings and even allegations of market manipulation in the past.
This news might impact the price of some ERC 20 tokens both in the short and long term.
Some users have sent tokens to a Coinbase address, thus locking them away. Once Coinbase becomes a custodian of ERC-20 tokens, it would be able to provide a recovery in those cases. However, the tokens would not be available for commercial purposes at this stage.
Most ICO assets do not have a convenient fiat ramp, and even the potential for being added on Coinbase may boost their price.
It is unknown how regulators would react, given that some tokens are considered unregistered securities and ICOs have often been closed to US buyers just for that reason.
There are rumors:
Coinbase is waiting for regulatory “clarity” before proceeding.
They are going after the Wall Street big shots…and want to deal more and more with commodities and securities (hence their Coinbase Asset Management Fund). So, there will be an entire institutional platform on GDAX…and they will list certain ERC20 tokens that cut SEC mustard.
What ERC20 support means for Coinbase products
Coinbase Custody — the Custody team is evaluating a set of assets to support for deposits and withdrawals. Note: Custody will likely support more assets than those available to trade on GDAX or Coinbase for the foreseeable future.
GDAX — the GDAX team will wait for additional regulatory clarity before they decide which ERC20 assets to support on GDAX. Support for ERC20 will also give them a path to enabling the safe recovery of customer ERC20 assets inadvertently sent to GDAX Ethereum addresses.
Coinbase Asset Management — per the index methodology, any asset listed on GDAX will be added to the Coinbase Index on a market capitalization weighted basis.
Coinbase — Coinbase will only list assets after they are listed on GDAX. After evaluating factors such as liquidity, price stability, and other market health metrics, they may choose to add any ERC20 asset added to GDAX to the Coinbase platform. It’s also worth repeating that GDAX will likely have more assets listed on the platform than the Coinbase platform, i.e. listing on GDAX does not guarantee listing on Coinbase.
Additionally, like GDAX, support for ERC20 will also give them a path to enabling the safe recovery customer ERC20 assets inadvertently sent to Coinbase Ethereum addresses.
Coinbase Commerce — no planned ERC20 support at this time.