As the most popular US-based cryptocurrency exchange, Coinbase, has ambitions to poise itself as a leader in next-generation trading. Brian Armstrong, the company’s CEO, said that he wants to take things to the next level and make it the New York Stock Exchange of cryptocurrencies and digital assets.
“It makes sense that any company out there who has a cap table… should have their own token. Every open source project, every charity, potentially every fund or these new types of decentralized organizations [and] apps, they’re all going to have their own tokens. We want to be the bridge all over the world where people come and they take fiat currency and they can get into these different cryptocurrencies,” he said at TechCrunch’s Disrupt conference on Saturday.
Coinbase has already been moving in this direction despite offering trading for only five different cryptocurrency pairs. The company has already been approved for facilitating the trade of securities tokens, giving it the edge it needs to become a securities exchange.
Armstrong wants to see Coinbase move from five traded assets to hundreds within “years,” perhaps even accommodating “millions” as the market progresses. Currently, it’s a headache to have a fiat-to-token gateway as some of these may be considered securities.
If an exchange offers trades in anything that its local regulator would consider a security, the regulatory territory can get murky very fast. For this reason, many exchanges choose to stay away from fiat pairs and maintain crypto-to-crypto trading.
However, we saw Binance start making plans to offer fiat-crypto pairs a few months ago through its base of operations in Malta. The difference is that Binance’s move applies to cryptocurrencies that are not defined as securities.
But is there really a demand for a fiat gateway into tokens when one could simply buy Bitcoin using Coinbase to subsequently trade it in crypto-only markets?
We will arrive at an answer to this question only when Coinbase begins implementing security token trading.