Coinbase is one of the most remarkable companies in the cryptocurrency industry. It is evident the company will continue to have a positive impact on this space for quite some time to come. Its latest venture involves operating as a regulated and licensed broker-dealer.
Another Major Coinbase Development
While some people love Coinbase and others hate it, everyone has to agree the company is trying to bring more legitimacy to the cryptocurrency industry as a whole. That is much easier said than done, as Bitcoin remains an unregulated industry in most parts of the world, including the United States. Making a positive impact in such regions will be challenging, even for entities such as Coinbase.
Even so, the company recently filed for approval from the SEC to become a regulated and licensed broker-dealer in the United States. Assuming it gets approved, Coinbase will become one of the first officially regulated entities to deal with cryptocurrency in such a way. Rest assured there will be plenty of opposition to this move.
Obtaining regulatory approval will not be easy. Acquiring a broker-dealer license, an alternative trading system license, and a registered investment advisor license are all necessary in order to achieve any form of success. Coinbase will remain under the oversight of the SEC and FINRA at all times. It’s a necessary evil, so to speak, especially for a company looking to offer blockchain-based securities in the future.
With the SEC already cracking down on ICO tokens which can be labeled as securities, it seems Coinbase is intent on bringing more legitimacy to such tokens in the future. Allowing customers to buy, sell, and trade such assets will pose a lot of new challenges as well as exciting opportunities. This move is part of Coinbase’s ongoing expansion into institutional products.
Coinbase added the following statement to its recent filing:
Ultimately, we can envision a world where we may even work with regulators to tokenize existing types of securities, bringing to this space the benefits of cryptocurrency-based markets — like 24/7 trading, real-time settlement, and chain-of-title. We believe this will democratize access to capital markets for companies and investors alike, lowering costs for all participants and bringing additional transparency and inclusion to the ecosystem.
The desire to obtain this particular license also explains why Coinbase has been on an aggressive acquisition spree as of late. The firm recently acquired Keystone Capital Corp, Venovate Marketplace Inc, and Digital Wealth LLC. At first, those deals made little to no sense, but it seems they were all catalysts for becoming a regulated broker-dealer in the United States.