Coinbase offers custody service for Bitcoin, Ethereum, Ripple and Litecoin
Another major obstacle to the entry of institutional investors into the market and thus to the flooding of the market by new capital is the uncertainty of storing larger amounts of capital. Coinbase now received the authorization to use its developed custody service in practice.
The New York Department of Financial Services (DFS) yesterday confirmed in a press release that Coinbase, through its subsidiary Coinbase Custody Trust Company LLC, may offer custody services for the digital currencies Bitcoin, Ethereum, XRP, Ethereum Classic and Litecoin (free translation):
The Department of Financial Services (DFS) of the State of New York has approved the application of Coinbase Custody Trust Company LLC, a wholly owned subsidiary of Coinbase Global, Inc. to act as a limited liability trust.
Coinbase Inc. has received money transmitter and virtual currency licences from DFS since January 2017. DFS has also granted Coinbase Trust the right to offer secure custody services for six of the largest virtual currencies: Bitcoin, Bitcoin Cash, Ethereum, Ether Classic, XRP and Litecoin.
This step is an important milestone to advance the adaptation of crypto currencies. DFS is notorious for very strict approval processes for companies wishing to offer services in the cryptographic market. Furthermore, Coinbase has been pursuing the strategy of keeping market entry barriers for Wall Street investors as low as possible for quite some time now.
For a long time, the possibility of securely storing crypto currencies with appropriate hedging was regarded as an obstacle for institutional investors to enter the market. Coinbase already announces in August of this year that it will introduce custody services for 37 currencies.
Although XRP is not yet offered for trading on Coinbase, Coinbase is allowed to offer a custody service for it. However, whether Coinbase plans to integrate XRP promptly on the stock exchange remains pure speculation for the time being.
