Coinbase targets institutional investors with digital currency storage service
Cryptocurrency exchange Coinbase is setting up a new firm to help institutional investors securely store their digital assets.
As one of the biggest players in the bitcoin game, Coinbase already stores more than $9 billion of digital currency on behalf of its customers.
Now the firm has spotted a new opportunity among the growing number of hedge funds jumping into digital assets, setting up Coinbase Custody with a promise to keep their bitcoin safe.
In a blog, Coinbase CEO Brian Armstrong claims that there could be as much as $10 billion of institutional money waiting on the sidelines to invest in digital currency.
But: “When we speak with these institutions, they tell us that the number one thing preventing them from getting started is the existence of a digital asset custodian that they can trust to store client funds securely.”
The new venture will have strong financial controls and cyber and physical security, says Coinbase, and be made available to institutional investors with at least $10 million in deposits. Firms will need to fork out a $100,000 setup fee and pay a 10 basis points per month fee on assets stored.
“The next step to accelerating the world’s adoption of digital currencies is to unlock the institutional money preparing to enter the space,” says Armstrong.