Coinbase Broadens Its Focus to Include ERC20 Tokens
On March 26, 2018, Coinbase, the San Francisco-based cryptocurrency vendor and exchange, announced on its blog that it will add Ethereum-based tokens to its crypto offerings:
“We’re excited to announce our intention to support the Ethereum ERC20 technical standard for Coinbase in the coming months. This paves the way for supporting ERC20 assets across Coinbase products in the future, though we aren’t announcing support for any specific assets or features at this time.”
What is ERC20? It’s the standard that Ethereum smart contracts and tokens use and developers must comply with. Currently on GDAX, Coinbase’s digital assets trading platform, Coinbase trades Bitcoin, Bitcoin Cash, Ether, and Litecoin. By choosing to support ERC20, the standard used to build Ethereum-based tokens, this opens the possibility that Coinbase will trade tokens like Qtum, EOS, and Bancor in the future. Ethereum tokens hugely outnumbered other tokens in the 2017 ICO market.
Of course, Coinbase cannot say when exactly it will offer support for specific token because of confusion that resulted from the statement SEC Chairman Jay Clayton made last December. In it Clayton said that any token issuers who market their tokens as a profitable investment opportunity could be subjected to U.S. securities enforcement. Clayton indicated that he believes not all ICOs qualify as securities and there are cryptocurrencies that do not appear to be securities, but he did not clarify which tokens – equity or utility – would be considered securities. This has left token issuers at a loss of to proceed with their ICOs – or even talk about them to their potential customer bases.
It looks as if Coinbase, with this announcement, is positioning itself as a trader of securities and commodities and as a stronger competitor for Robinhood which itself recently focused its attention on cryptocurrency trading as a way of luring more stock market traders to its service. Until the SEC clarifies its oversight of tokens, however, Coinbase must wait to add tokens to its offerings list.
Buterin Backs OmiseGo
The only Ethereum-based token Ethereum co-founder Vitalik Buterin has backed as of yet is OmiseGo. OmiseGo (OMG) is a subsidiary of Omise, a Southeast Asian online payment gateway service provider that has been involved in the Ethereum community since 2015. It was, in fact, the first financial services company to join. OmiseGo has two stated goals on its website:
- To use the OMG network to access, manage, and transact with digital assets that are kept securely on chain.
- To build an app with our SDK to enable wallet-to-wallet transactions of crypto and fiat currencies, loyalty points, game credits and more.