One of the worlds largest exchanges Coinbase is looking to expand internationally with an exciting new announcement today for its customers in Europe and Asia.
High volume traders will now get access to cross-border wire transfers, custodial services, and an OTC trading desk.
The Asian and European customers with high trading volumes on either Coinbase Pro and Prime will now be able to use cross-border wire transfers to deposit money into their accounts.
Additionally, select customers who use Coinbase Prime will also get access to Coinbase’s Over the Counter (OTC) trading desks as well as access to Coinbase Custody, the exchange’s dedicated crypto cold storage-as-a-service platform.
The move was made as the company said that hundreds of crypto-leaning hedge funds were launched in the past year and many proprietary trading firms, endowments and family offices have started trading digital assets. Advantages of custody accounts come as the funds being held by the exchange are often segregated and therefore are supposedly safer.
Some of these services are live already. The international wire transfer service has gone live for customers who live in countries which do not have fiat rails as of yet. Coinbase will support both incoming and outbound transactions from non-US bank accounts using the SWIFT method. Swift is the method often used by banks and payment institutions to transfer fiat currency.
By using Coinbase Prime, each of these USDC stable coin tokens is exchangeable for 1 US Dollar at any time, at no charge.
Custodial services are currently live in Asia and are set to be approved customers in Europe and other Asian nations soon (no timeframe attached). With these services, the exchange will be able to offer an institutional-grade cold storage facility for storing a large number of crypto assets.
The OTC desk has also started in Asia first, is has been said that the OTC desk is agency only, which means that the exchange will never trade on a principal basis or against their clients. There are many over the counter (OTC) exchanges over the world. All this means is that there is no centralised exchange like the London Stock Exchange for example. There are advantages and disadvantages to this the main advantage being regulation.
Kayvon Pirestani, head of institutional sales in Asia said “Asia is super important to the crypto ecosystem,’’, he went on to comment. “It’s home to some of the most active retail traders in the world as well as a lot of institutional investors.”
What does this all mean?
Coinbase is moving toward a more traditional brokerage offering. By offering custodial accounts it could mean they might offer margin trading as you see in other asset classes like FX (Forex). This is where you can deposit a certain amount and leverage the funds to trade with higher ticket size. So all is going well for the exchange who secured more funding in October at a valuation of $8 billion, this was based on the fact they generated $1.3 billion in sales over 2018.