Coinbase announced yesterday that they would increase the number of digital assets significantly in the coming months. There are also plans to list these digital assets by segregating them by jurisdictions. This would mean that the tokens used for digital transactions in one country may not be valid in some other country by virtue of the security laws specified in that country.
Coinbase Consumer VP and General Manager Dan Romero explained this decision as a move to attract diverse customers. It will also strengthen their position as a digital foreign exchanges, he said.
In this announcement, Coinbase also specified the criteria for approving or rejecting a digital asset application while ensuring the process is unbiased, efficient and error-free:
- The digital asset should be legally compliant in the said jurisdiction
- The asset is technically secure
- There is a clear need of the asset amongst the customers
Many crypto experts see this move as a bit tricky, as regulation of laws across different jurisdictions can be expensive and time-consuming. With more than 1800 Coinbase tokens in existence currently and a lot more to launch in the near future, the process could become even more tedious. However, they also estimate Coinbase’s revenue to shoot tenfold within the next year, from approximately $1 billion in 2017 to more than $10 billion.
This move by Coinbase replicates Facebook’s platform strategy of building a two-sided marketplace, mainly between content creators and the consumers. For instance, Facebook empowered developers with the tools needed to create and monetize their own applications and games on Facebook. This strategy worked as it allowed Facebook to benefit from each of game, app, or advertising content created on its platform, leading to their faster growth and profitability.
Interestingly, it is also worth remembering that Facebook’s Blockchain head David Marcus stepped down from his position in the Coinbase board to avoid any conflict of interest. There have also been talks of Facebook looking to acquire Coinbase, in the past.
With Coinbase looking to scale quickly in the near future, this new platform strategy seems to be a great initiative to branch out and establish themselves as the best Bitcoin exchange there is. So far, they have already served more than 20 million customers, and traded more than $220 million in cryptocurrency since 2012. They currently operate in 33 countries with more than 500 employees across offices in the United States, U.K. and Japan.