The Blockchain Bitcoin & Crypto Weekly CXO Briefing is all you need to know, each week, jargon free for CXO level business leaders and investors who will use this technology to change the world. Each week we select the 3 news items that matter and explain why and link to one expert opinion.
For the intro to this weekly series, please go here.
Story 1: Our path to listing SEC-regulated crypto securities
Decrypted: Coinbase, announced that they are on the verge of becoming a broker-dealer, capable of offering crypto securities that will be regulated by the SEC.
Coinbase wants to become a fully licensed broker-dealer through its acquisition of three federally regulated firms: Venovate Marketplace Inc, Keystone Capital Corp, and Digital Wealth LLC.
If approved, these licenses will set Coinbase on a path to offer future services that include crypto securities trading, margin and over-the-counter (OTC) trading, and new market data products.
Our take: Coinbase is working hard to achieve regulatory compliance as the cryptospace strives for mass adoption. With these recent acquisitions Coinbase positions itself as a company that wants to be at the center of everything crypto.
Especially with the Keystone Capital acquisition, which is central to Coinbase's bid to become a fully SEC-regulated broker dealer.
The main thing that Coinbase gets from the deal are licenses that let it register with the government to offer its customers even more financial services and possibly more altcoins as well.
Given Coinbase’s exposure, as well as the potential threats to their market share from companies like Robinhood, this move is not as very surprising. The broker-dealer status may offer Coinbase a strategic advantage against Circle and Robinhood, which are competing for cryptocurrency customers.
Also, Coinbase announced the intention to support the ERC-20 technical standard and eventually add ERC-20 tokens to Coinbase to trade with fiat currency pairs. Also Coinbase recently received an e-license by FCA, a U.K. regulator and looks to speed up transaction speeds, as well as creating a presence among European nations.
With over 150 different cryptocurrency exchanges, Coinbase is looking at other ways to extend its reach globally and staying competitive. One motive is growth via acquisition, which is on the Coinbase radar.
To this day, with cryptocurrencies numbering over 1,500, Coinbase only offers four on its platform: BTC, ETH, BCH, and LTC. This will very likely change in the future.
Coinbase was founded in 2012 and since then they have made the following five acquisitions: 1) Kippt, a bookmarking tool 2) Blockr.io, a blockchain explorer 3) memo.ai, a Slack-based wiki 4) Earn.com, task-platform 5) Cipher Browser, a dapp Browser.
Though these all of its acquisitions, Coinbase wants to be seen as the gateway to a more open financial system for the world, and wants take its own substantial cut in the process.
With all said and done, the battle between the market participants has definitely begun and we can expect many strategic and counter moves as they fight for market share.
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