Coinbase Asset Management Unveils Project Diamond, Revolutionizing Traditional Finance on Blockchain

Coinbase and Coinbase Asset Management have unveiled “Project Diamond,” a smart contract-powered platform aimed at empowering institutions to seamlessly create, manage, and trade a variety of digitally native assets directly on the blockchain. The platform’s maiden execution of a digital debt instrument, denominated in USDC, showcased its capability for near-instant settlement on Base, Coinbase’s Ethereum Layer 2 blockchain.

With less than 0.25% of global assets currently on blockchain infrastructure, Project Diamond aims to capture substantial efficiency gains. The platform leverages Coinbase Prime custody, Coinbase’s web3 wallet, the USDC stablecoin, and Base to provide a secure and compliant capital market experience. The recent demonstration of a digital discount note marked a significant advancement in operational efficiency, simplifying financial processes and unlocking institutional participation in the cryptoeconomy.

Project Diamond, developed by Coinbase Asset Management, emphasizes bringing traditional financial assets onto the blockchain. The platform has received in-principle approval from the Financial Services Regulated Activity (FSRA) of Abu Dhabi Global Market (ADGM) and is set to enter the ADGM RegLab sandbox, a regulatory framework supporting FinTech innovation. The platform’s first debt instrument, executed as a technical demonstration, signals a pivotal step toward integrating traditional finance with blockchain technology.

Coinbase’s initiative comes amidst intensifying competition between global banks and crypto-native companies to tokenize real-world assets (RWAs). Project Diamond goes beyond tokenization, creating digital assets directly on the blockchain rather than token versions of existing instruments. Shaun Martinak, head of infrastructure development at Coinbase Asset Management, emphasized the transition to digitally native assets, foreseeing a future where these assets are created and matured fully on-chain, harnessing the potential of next-generation infrastructure.

As Project Diamond prepares to enter the ADGM RegLab sandbox, Coinbase aims to lead the way in enabling institutional use of next-generation financial technology. The platform seeks world-class partners to collaborate in shaping the future of the global financial system. The move aligns with a broader industry trend toward bringing efficiency, transparency, and innovation to traditional financial processes through blockchain integration.