Banks are increasingly launching their own digital asset services, and Coinbase is serving as their infrastructure provider while also bolstering its prime offerings, Liz Martin, head of Coinbase Institutional, said in an interview with Bloomberg News Thursday (Oct. 8).
“We’ve seen really rapid growth” in prime brokerage, she said. “It’s probably one of the fastest growing areas of our business.”
As Bloomberg notes, other crypto firms have recently been building up their prime brokerages — combining things like custody, trading financing and settlement for banks — as traditional finance has embraced crypto. BNY, DBS Bank and U.S. Bank all provide crypto custody services, while Deutsche Bank recently announced its plans to move into the space.
Martin indicated there is no conflict for Coinbase given its dual role in providing trading and infrastructure services, adding that more participation from traditional finance benefits both.
“They’re both fueled by the same thing, which is institutional adoption of crypto and a desire to put more financial services on chain,” Martin said.
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Coinbase announced Thursday it would custody balances of Circle’s USDC stablecoin in Samsung Wallet via Coinbase Prime, its institutional platform, the report added.
USDC will become the default dollar stablecoin for the Samsung payment service, with a launch in the U.S. expected before the end of the month, Bloomberg said.
Also this week, Coinbase said it had finalized the integration of Deribit and would soon link its U.S. and international crypto-derivatives markets in one liquidity pool. Coinbase agreed to acquire Deribit — described at the time as the world’s largest trading platform — last year, paying approximately $2.9 billion.
In other crypto news, PYMNTS wrote earlier this week that while stablecoins are seeing greater institutional support and improved infrastructure, new Federal Reserve research shows they haven’t picked up much corporate demand.
According to research by the Federal Reserve Bank of Cleveland, the biggest obstacles to corporate adoption of stablecoins were not related to regulatory uncertainty or lack of access.
“Companies instead were satisfied with existing payment methods, unsure of the economic benefit of stablecoins and, critically, were not being asked by customers or suppliers to transact differently,” PYMNTS wrote.
The findings are in keeping with PYMNTS Intelligence research, which shows that while 42% of middle market companies had at least discussed, tested or used stablecoins, only 13% were actually using them.
“The findings separately illustrate the widening gap between corporate curiosity and production deployment,” the report added.
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