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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Coinbase is launching a Wallet-as-a-Service (WaaS).
The offering will enable businesses to build web3 wallets for their customers, using only web2 skills.
Initial customers for the launch include NFT marketplace Floor, gaming platform Moonray, and token-gated events site Tokenproof.
Digital currency platform Coinbase launched a Wallet-as-a-Service (WaaS) this week. The new offering is aimed to help any company build customizable wallets for their clients, bringing them into the web3 era.
The launch comes after Coinbase realized that web3 wallets were out of reach for many businesses. These on-chain wallets– which help users store digital assets, facilitate transactions, and act as a digital identity– are complex and require technical knowledge. Coinbase’s WaaS aims to simplify things by enabling companies to offer a digital wallet onboarding experience that requires only a username and password. Coinbase will also enable companies to offer the wallet within their own app, enabling in-app transfers of currency or digital assets all in one place.
The WaaS tool enables users to access a web3 wallet using a web2 interface. Also making things easier for those new to web3 is the security. With WaaS, users are not required to manage their own keys. Instead, Coinbase uses advanced multi-party computation to securely divide, encrypt, and distribute keys among multiple parties.
Coinbase has already secured a handful of clients for its WaaS, including NFT marketplace Floor, gaming platform Moonray, and token-gated events site Tokenproof. “Individuals will no longer have to come with knowledge of how the blockchain works in order to interact with the brands they love,” said Tokenproof Founder Fonz. “When users download the tokenproof app, we’ll help welcome them into web3 by creating their first wallet, which will be powered by Coinbase.”
With 1,110 verified users on its platform, Coinbase sees $145 billion in quarterly volume traded and has $80 billion in assets on its platform. The company went public in 2021 and now trades on the NASDAQ under the ticker COIN with a current market capitalization of $14 billion. Earlier this month, Coinbase acquired digital asset management company One River Digital Asset Management in an effort to bridge the gap between financial institutions and the crypto economy.
Cryptocurrency Investment Platform Pillow Raises $18 Million
In a round co-led by Accel and Quona Capital, crypto investment platform Pillow has secured $18 million in Series A funding. Also participating in the round were Elevation Capital and Jump Capital.
Singapore-based Pillow enables individuals to save and invest in a variety of major cryptocurrencies. The company will use the capital to power expansion of its cryptocurrency savings and investment services into emerging markets in Africa and Southeast Asia. Pillow already operates in Nigeria, Ghana, and Vietnam. This week’s funding adds to the $3 million in seed capital Pillow secured earlier this year.
Founded in 2021, Pillow has more than 75,000 users in more than 60 countries on its app. Among the cryptocurrencies available are: Bitcoin, Ethereum, Solana, Polygon, and Axie Infinity, as well as USD-backed stablecoins, USDC and USDT. Pillow plans to support more than 20 different digital assets over the next few months. The company offers returns of more than 10% on its stablecoins and approximately 6% on Bitcoin and Ethereum. Pillow earns its money by investing user funds in DeFi protocols on blockchain networks.
BlueSnap and BitPay Team Up for Crypto Acceptance and Payout
Payment orchestration platform BlueSnapannounced a new partnership this week. The company is teaming up with cryptocurrency payments company BitPay to enable businesses to accept and make payouts in as many as 15 different cryptocurrencies – as well as seven fiat currencies. The currencies available include leading digital assets such as Bitcoin, Ethereum, Litecoin, Ripple, and Dogecoin. Five stablecoins pegged to the U.S. dollar and one stablecoin pegged to the Euro will also be supported.
Courtesy of the partnership, customers will be able to accept cryptocurrencies and be paid out in fiat currencies including the U.S. dollar, the Euro, the British pound, and the Mexican peso, as well as the Canadian, Australian, and New Zealand dollars.
BlueSnap and BitPay noted in a statement that a growing number of retailers are accepting cryptocurrencies as payment, and that consumers were becoming increasingly “crypto curious.”
“By working with one of the most well-respected crypto companies in the industry, we’ll be able to make the new payment experience as frictionless as possible,” BlueSnap Managing Director for Europe Nihkhita Hyett said. “We look forward to making a real impact in this new space – through developing technologies like blockchain and cryptocurrency – as we foster greater innovation in payments, and further our growth across Europe.”
WSJ: NYDIG Lays Off a Third of its Workforce
According to reporting in the Wall Street Journal, institutional cryptocurrency custody firm NYDIG has laid off more than 100 of its workers, an amount believed to be approximately a third of the New York-based crypto firm’s total workforce. The layoffs took place over a number of weeks per the Journal’s sources, and come almost a year after NYDIG raised $1 billion in funding at a valuation of more than $7 billion. NYDIG mentioned using the capital to “further expand its world-class team across the globe” – though this was noted toward the end of the company’s funding announcement. Using the capital to “develop NYDIG’s institutional-grade Bitcoin platform” was noted in paragraph two.
More recently, NYDIG was in the headlines for the C-suite shuffle in October that had CEO Robert Gutmann and President Yan Zhao stepping down and returning to NYDIG’s parent company Stone Ridge Holdings. Gutmann and Zhao co-founded Stone Ridge, along with Ross Stevens, in 2012.
There has been no comment on the lay off report from NYDIG at this time.
Mastercard Teams Up with Blockchain Platform Paxos
Our last edition of 5 Tales highlighted Mastercard’s new Crypto Secure solution that helps card issuers assess the risk profile of crypto exchanges and other providers.
This week we share more news of Mastercard and its business in the crypto space. The company has announced a partnership with blockchain infrastructure platform Paxos that will enable financial institutions to offer secure cryptocurrency trading capabilities to their customers. Mastercard’s Crypto Source program will give its financial institution partners access to a suite of services that will enable them to buy, hold, and sell select crypto assets.
The suite of services provides technology and partnership support to enable FIs to buy, sell, and hold select digital assets; security management, including AML, transaction monitoring, and KYB; crypto spend and cash out capabilities; and crypto program management, including go-to-market optimization.
“What we are announcing today is a connected approach to services that will help bring the next billion users safely and securely into the crypto ecosystem,” Mastercard President, Cyber & Intelligence, Ajay Bhalla said.
Coinbase Expands in Europe – And Adds a Friend in Google
Cryptocurrency exchange Coinbase has had more than its fair share of less than pleasant news over the past few days. Today we read headlines about the company experiencing the largest outflow of Bitcoin since June. This follows reports of hundreds of Coinbase users in the Republic of Georgia who allegedly profited from a pricing glitch – and what Coinbase may have to do to get the money back.
Meanwhile, the San Francisco-based company continues to grow, expanding its operations in Australia earlier this month with a pair of new features. PayID will enable Australians to top up their Coinbase accounts directly with Australian dollars. Retail Advanced Trading will give local clients access to low volume-based pricing and trading tools with one unified balance.
And earlier this week, Coinbase introduced the man who will lead the company’s expansion in Europe: former Solarisbank Chief Operating Officer Daniel Seifert. The appointment comes as Coinbase gains momentum in the region, earning regulatory approval to offer its services to customers in Italy in July and the Netherlands in September. Coinbase VP of International and Business Development Nana Murusegan has called international expansion an “existential priority.”
But the biggest news of the week for the company is the announcement that Google has partnered with Coinbase to allow select customers pay for cloud services via cryptocurrencies starting early next year. The capability will be made possible thanks to an integration with Coinbase Commerce, which supports 10 cryptocurrencies including Bitcoin, Ethereum, Dogecoin, and Litecoin. Coinbase will earn a fraction of each transaction processed, according to the company’s VP of Business Development Jim Migdal.
Coinbase made its Finovate debut in 2014. More than 100 million individuals and companies use Coinbase’s technology to buy, sell, and hold cryptocurrencies.
Enthusiasm for cryptocurrencies has settled down from its peak a year ago. But innovation in the space continues undaunted. Today we learned that one of the pioneering companies in digital assets, Coinbase, has forged a strategic partnership with Google Cloud. The partnership calls for Coinbase to use Google Cloud as its strategic cloud provider for developing advanced exchange and data services. Google Cloud’s platform will enable Coinbase to process blockchain data at scale, and boost the international reach of its services courtesy of Google Cloud’s fiber optic network. Coinbase will also benefit from Google Cloud’s secure infrastructure and the company’s data and analytics capabilities.
“We are excited Google Cloud has selected Coinbase to help bring Web3 to a new set of users and provide powerful solutions to developers,” Coinbase CEO and co-founder Brian Armstrong said. “With more than 100 million verified users and 14,500 institutional clients, Coinbase has spent more than a decade building industry-leading products on top of blockchain technology. We could not ask for a better partner to help execute our vision of building a trusted bridge into the Web3 ecosystem.”
The partnership also means that Google Cloud will enable select customers to pay for its cloud services with designated cryptocurrencies. The functionality will be powered by Coinbase Commerce, which provides a decentralized way for merchants around the world to accept cryptocurrency payments. Further, Web3 developers will be able to access Google’s BigQuery crypto public datasets – powered by Coinbase Cloud Nodes – across leading blockchains. This will enable developers to operate Web3-based systems without requiring expensive and unwieldy infrastructure.
Google Cloud CEO Thomas Kurian said the partnership would help make it easier and faster for developers to build Web3. Kurian highlighted the “scalability, reliability, security, and data services available via Google Cloud” which he said would enable developers to “focus on innovation in the Web3 space.” Google also announced that it will use Coinbase Prime for institutional crypto services such as secure custody and reporting.
Coinbase’s partnership news with Google Cloud comes as the cryptocurrency innovator announces that it has secured regulatory approval from the Monetary Authority of Singapore (MAS). The company received its In-Principle Approval (IPA) as a Major Payments Institution license holder, which will enable Coinbase to offer regulated Digital Payment Token products and services in Singapore. It’s worth noting that Coinbase is no stranger to the country. The company introduced the island nation as its technology hub last year. And over the past three years, Coinbase’s venture capital arm, Coinbase Ventures, has invested in more than 15 Singapore-based Web3 startups.
“Today’s announcement underlines our commitment to Singapore as a regional hub that allows us to unlock new capabilities for Singapore-based institutional and corporate clients in the future,” Coinbase’s Nana Murugesan wrote on the company blog this week. “Gaining this in-principle approval from MAS is an important step, as we plan to launch our full suite of retail, institutional, and ecosystem products.”
Coinbase made its Finovate debut in 2014 at FinovateSpring in San Francisco, California. Founded in 2012, the company now enables more than 100 million people and businesses to buy, sell, and manage cryptocurrencies. Coinbase has a quarterly trading volume of $217 billion, and $96 billion in assets on its platform. With partners in more than 100 countries, and 4,900+ employees, Coinbase is a publicly-traded company on the NASDAQ exchange under the ticker COIN and has a market capitalization of $16 billion.
BlackRock has selected Coinbase to help its clients buy and sell bitcoin.
Under the partnership, clients of BlackRock Aladdin will benefit from Coinbase Prime.
Partnering with Coinbase will help BlackRock add digital currencies as an asset class for the first time.
Coinbase is partnering with BlackRock to help some of the asset manager’s institutional clients connect to Coinbase Prime, making it possible for them to buy and sell bitcoin.
Under the agreement, common clients of Coinbase and BlackRock’s end-to-end investment management platform Aladdin, will benefit from Coinbase Prime, a full-service platform to access crypto markets at scale. At the outset, Aladdin clients will be limited to using Coinbase Prime to buy and sell bitcoin.
With $10 trillion in assets under management, BlackRock offers clients a range of investment strategies, including alternative assets, sustainable investing, factor-based investing, systematic investing, and now digital assets. The company has 8,000 employees across the U.S. and works with more than 190,000 financial advisors to help build client portfolios.
The move adds cryptocurrency as an asset class for BlackRock clients for the first time. “Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets,” said BlackRock Global Head of Strategic Ecosystem Partnerships Joseph Chalom. “This connectivity with Aladdin will allow clients to manage their bitcoin exposures directly in their existing portfolio management and trading workflows for a whole portfolio view of risk across asset classes.”
BlackRock and Coinbase will roll out functionality in phases to interested clients.
Coinbase was founded 2012 and went public late last year. The company trades on the NASDAQ under the ticker COIN. The news of a new client for Coinbase Prime has given Coinbase a boost this week after the recent crypto winter took its toll on the company, which announced a hiring freeze and layoffs earlier this summer. Coinbase’s market capitalization currently sits at $19.74 billion.
Cryptocurrency exchange platform Coinbaseacquired Israel-based security company Unbound Security today. Terms of the deal, which Coinbase calls the next phase of its security journey, were not disclosed. Coinbase expects the deal to close in the coming months.
Unbound specializes in cryptographic security technologies, including secure multi-party computation (MPC), an emerging subfield of cryptography that allows parties to jointly compute a function over their inputs while protecting their data. Essentially, MPC enables crypto assets to be stored, transferred, and deployed more securely, easily and flexibly.
Today’s deal will give Coinbase access to cryptographic security experts, including Unbound Co-founders Guy Peer and Yehuda Lindell, who is considered a world leader in MPC. Coinbase will also gain a presence in Israel and plans to establish a tech center in the country. The company states that this global reach will “add an additional powerful prong” to its global talent acquisition strategy.
“We’ve long recognized Israel as a hot bed of strong technology and cryptography talent, and are excited to continue to grow our team with some of the best and brightest minds in these fields,” the company said in its blog post announcement. “The Unbound Security team will form the nucleus of this new research facility, which we plan to grow over time.”
The purchase of Unbound marks Coinbase’s twentieth acquisition since the company was founded in 2012. Coinbase has acquired six companies this year alone, including financial software company BRD, voice AI startup Agra, crypto wallet API provider Zabo, financial infrastructure company Skew, and blockchain security firm Bison Trails.
Coinbase, which demoed at FinovateSpring 2014, went public earlier this year and now trades on the NASDAQ under the ticker COIN. The company has a current market capitalization of $67 billion. Earlier this fall the company announced plans to launch its own NFT marketplace, Coinbase NFT, to help users mint, purchase, showcase, and discover NFTs.
Cryptocurrency exchange platform Coinbaseannounced plans this week to launch its own NFT marketplace. Dubbed Coinbase NFT, the new marketplace will help users mint, purchase, showcase, and discover NFTs.
“Just as Coinbase helped millions of people access Bitcoin for the first time in an easy and trusted way — we want to do the same for the NFTs,” said Coinbase VP of Product and Ecosystem Sanchan Saxena.
Coinbase NFT, which the company aims to launch at the end of this year, will offer a user-friendly interface that the company said will be “as simple as tapping a few buttons.” The new platform will be creator-centric, placing art and the artist’s experience at the forefront.
Coinbase is putting creators first by leveraging decentralized contracts and metadata transparency to help artists maintain creative control. Additionally, the platform will cultivate a community for artists and their fans using social features to help users discover and discuss NFTs. Coinbase NFT will curate a personal feed based on users’ interests. User profiles will showcase all of their NFTs and will help them connect with like-minded collectors and artists.
“Our ambition with Coinbase NFT is to allow everyone to benefit from their creative spark; to contribute to a future where the creator economy isn’t a small subset of the real economy, but a central driver,” said Saxena.
Coinbase NFT will compete with NFT exchange platforms such as OpenSea, one of the major players in the space. According to TechCrunch, OpenSea facilitated $3.4 billion in transaction volume in August of this year. Coinbase NFT boasts two differentiating factors that set it apart from OpenSea. The first is that Coinbase is placing a large focus on the social and community aspects of its tool, something that OpenSea lacks. Coinbase’s second differentiation is that it comes with brand recognition and a built-in client base of 68 million users.
Currently, there is no word from Coinbase on the commission percentage it will charge artists, nor on the royalty percentage for perpetual trades. Whatever it decides, it will need to compete with OpenSea’s relatively-low 2.5% fee.
Coinbase went public on the NASDAQ earlier this year, trading under the ticker COIN. The San Francisco-based company’s user numbers increased 44% in the third quarter of this year, up from 56 million users in the previous quarter. Brian Armstrong is CEO.
Recent news headlines have underscored the long-standing relationship between fintechs in India and the UAE.
This week, we learned that Indian payment solution provider PayMate has teamed up with both Visa and Citi to automate business payments in the UAE. The collaboration will involve both accounts payables and receivables, enabling institutions to benefit from end-to-end payment automation.
Access to PayMate’s platform also will give corporations in the UAE the ability to take advantage of longer Days Payable Outstanding (DPO) as purchasers, as well as make supplier payments earlier. The platform, which auto-reconciles both made and received payments in real-time, also allows for settling of corporate card payments directly into the accounts of suppliers.
A Visa-certified Business Payment Solution Provider (BPSP), PayMate is looking to leverage its relationship with Visa into offering both its platform and working capital solutions to other countries in the region. More than 105,000 Indian businesses currently use the PayMate platform.
Also this week we learned of that a partnership between the National Payment Corporation of India (NPCI) and UAE-based Mashreq Bank will bring Unified Payments Interface (UPI) to the UAE to support Indian business and leisure travelers to the country.
Unified Payments Interface is an instant, real-time payment system launched by NPCI that enables multiple accounts to be controlled via a single mobile app. The solution supports a wide range of banking features ranging from money transfers to bill sharing and billpay to merchant payments. Introduced in 2016, UPI currently facilitates 10% of all retail payments in India, and has more than 100 million monthly active users in the country. Last year, $457 billion in value moved on the UPI platform, and analysts believe that UPI will top both Visa and Mastercard in India by 2023.
And while bringing UPI to the UAE will be a major boon for Indian travelers and expats in the country, the UAE stands to benefit as well from the support that additional digital payment activity will provide to the UAE’s digital payments ecosystem.
“We are delighted to collaborate with NIPL (NPCI International Payments) to introduce their mobile-based real-time payment systems to our customers in the UAE,” EVP and Head of Payments for Mashreq Bank Kartik Taneja said. “Given the position of UAE as an international commerce and tourism hub, retail merchants in the Emirates always enable the latest payment methods that are expected by our international clients.”
It is worth pointing out that Indians represent the largest expatriate community in the United Arab Emirates, its more than 3.4 million members representing more than 38% of the UAE population. And while this is no surprise to anyone who has visited the UAE, the impact of this sizable population on the fintech industries of both nations is notable. In the summer of 2019, the Dubai Startup Hub, a project of the Dubai Chamber of Commerce and Industry, announced its intention to “woo” Indian fintechs to the UAE with a $100 million fund for financial services startups.
Underscoring Dubai’s role as a “testbed” for enabling technologies like blockchain and AI,” Manager of the Entrepreneurship Department at the Dubai Chamber of Commerce Natalia Sycheva noted that Indian startups represented more than 30% of the total start-up community in the country. “When we decided to launch the programme of attracting overseas start-ups here,” Sycheva said, “naturally the first choice was India, as 30% co-founders of our Dubai Startup Hub have Indian origin.”
Here is our look at fintech innovation around the world.
The news is abuzz with excitement about Coinbase’s IPO. The San Francisco-based digital currency platform began trading on the NASDAQ under the ticker COIN for $381 per share today and closed out the day at just over $328 per share.
It’s always exciting when a fintech company goes public, but there are a few reasons why Coinbase’s debut is particularly compelling:
Legitimacy
Coinbase’s listing helps legitimize cryptocurrency in general. Many everyday consumers consider cryptocurrency as a medium of exchange for fraudsters and bad actors on the dark web. This will shift, however, to placing digital currencies in a more positive light and consumers will begin to understand the true benefits of crypto– a tool for faster payments, a way to lower fees, and an agent for a more inclusive financial system.
Sets the stage
The Coinbase IPO sets a precedent for others in the cryptocurrency industry to go public. Digital currency wallets and crypto marketplaces are closely tied to the price of cryptocurrencies, which have historically been extremely volatile.
Despite the uncertainty, Coinbase has proven to be profitable. According to the New York Times, Coinbase made $730 million to $800 million in net profit on $1.8 billion in revenue in the first quarter of this year. The company’s performance in the public eye will dictate the moves of others in the cryptocurrency industry, including bitcoin exchange Kraken, which is considering a public listing next year.
Ready for CBDCs?
One effect we may see come from Coinbase’s move into the public eye is its potential to prime the U.S. market for central bank digital currencies (CBDCs). This reflects back to the first discussion point about offering a sense of legitimacy to the cryptocurrency realm.
The U.S. hasn’t taken any formal actions toward the launch of its own digital currency. However, multiple other nations, including China, Brazil, and Russia, have recently made announcements regarding their own nations’ CBDCs. Bringing cryptocurrency into the realm of traditional finance helps ready the everyday U.S. consumer for the eventual proliferation of digital currencies.
An increase in demand
Will Coinbase’s exposure outside the cryptocurrency space increase the number of people holding digital currencies?
Ben Weiss, CEO of crypto ATM provider CoinFlip answers it this way, “While it is hard for us to know if more people will get into crypto just because Coinbase is trading publicly, we know for sure that at least people who were too scared of the volatility of bitcoin can now take a more traditional approach by buying Coinbase stock. There will definitely be a lot of these people and hopefully this is a gateway for them to get into bitcoin over time.”
From its role as a digital currency innovator to its controversial, politics-free workplace stance, Coinbase continues to be one of fintech’s most compelling stories. And with the company moving ever closer toward a becoming a publicly-traded firm, attention on the San Francisco, California-based digital currency exchange only has intensified.
There may be no better example of this dynamic than an article published on Bloomberg.com this week headlined “Coinbase Is a $100 Billion Crypto Cult.” The author, Jared Dillian, is an investment strategist who wastes little time in letting readers know where he stands on a platform that “has frequent service outages, nonexistent customer service, and sky-high transaction costs.”
Nevertheless, as Dillian acknowledges, there are precious few alternatives for individual cryptocurrency investors. Moreover, much of his dissatisfaction seems to stem from an unfavorable comparison between Coinbase and discount stock brokerages – which have very different histories as well as very different ways of generating revenue.
As for the cult reference, that too has less to do with Coinbase and more to do with the author’s take on the contemporary enthusiasm/mania for cryptocurrencies. If you believe that investment in Bitcoin and other digital assets “has crossed over into religion territory” and represents “an investment cult,” then it is understandable to be critical of an institution that facilitates the behavior. But that, as Dillian indicates, is akin to blaming the store for selling picks and shovels to the gold miners.
What is Coinbase eight and a half years after its launch in 2012 (and six and a half after its Finovate debut)? Will its going public mark the beginning of a new era in digital asset adoption by institutions and individuals? Or, as has been the case in the past, will the news signal, if not an end, then at least a pause in what has been a surge in interest in cryptocurrencies since the spring of 2020?
Here’s what we know: Coinbase has filed with the SEC to go public by way of a direct listing, selling shares directly to the public rather than via a traditional IPO. The company will trade on the Nasdaq under the ticker COIN. In terms of the company’s current valuation, at its most recent funding in 2018, Coinbase was valued at $8 billion. More recently, Axios has reported that Coinbase was valued at $100 billion when it sold shares on the Nasdaq Private Market earlier this year.
Coinbase currently has 43 million verified users (up from 12,000 in 2012). The company has a lifetime trading volume of $456 million and currently has more than $90 billion in assets on its platform. In fiscal 2020, the company experienced trading volume of $38 billion more than double that of fiscal 2018. And perhaps most critically, Coinbase has begun to secure the kind of institutional support that both the company and the cryptocurrencies it manages need. The company reported having 7,000 institutional customers as of the end of 2020, a seven-fold increase over 2017. Revenue growth also has been strong for Coinbase, with the company achieving revenues $1.3 billion in fiscal 2020 compared to $533.7 million in fiscal 2019.
What does this mean for a publicly-traded entity? The best case for $COIN may rest in its ability to serve as a safer haven for crypto-curious investors who do not have the interest in analyzing – or even deeply understanding – individual digital assets. Coinbase could find itself serving a role, in the near-term, that might otherwise be played by a Bitcoin or cryptocurrency exchange-traded fund. And if we are still in the early days of the Digital Asset Age, that may not be a bad place to be.
With bitcoin and cryptocurrencies enjoying renewed interest, it’s worth noting that many fintech fans encountered their first bitcoin-related businesses through Finovate conferences.
Here’s a look at some of the companies that have brought their bitcoin and crypto-powered innovations to the Finovate stage.
OpenCoin – FinovateSpring 2013 – The company now well-known as Ripple was introduced to Finovate audiences back in 2013. At FinovateSpring that year, Chris Larsen – CEO of a startup called OpenCoin – introduced its virtual currency and distributed open source payment network. Founded in 2012 and headquartered in San Francisco, California, Ripple currently has more than 300 financial institutions who leverage its RippleNet blockchain network to power real-time payments.
KlickEx – FinovateAsia 2013 – New Zealand-based KlickEx unveiled its asset-backed and algorithmic cryptocurrency for institutional and retail users at FinovateAsia in 2013. The company, founded in 2009, recently announced a partnership with the National Reserve Bank of Tonga to launch a new national payment system.
Coinbase – FinovateSpring 2014 – Among the bigger names in bitcoin and cryptocurrency to have demonstrated their technology at Finovate conferences is San Francisco, California-based Coinbase. Debuting at Finovate with its Instant Exchange in 2014, Coinbase has grown into one of the biggest players in the cryptocurrency market with more than 35 million verified users and more than $320 billion in total volume traded on its platform.
AlphaPoint – FinovateEurope 2015 – With more than $350 million in monthly trading volume and 20 digital currency exchanges operating in 15 countries, AlphaPoint is a leading fintech exchange platform provider for digital currencies. The company demoed version two of its digital currency exchange platform at FinovateEurope in 2015.
CoinJar – FinovateEurope 2015 – Australia’s largest and longest-operating bitcoin company, CoinJar demonstrated its platform at FinovateEurope 2015. The Best of Show-winning firm was the first in its market to offer a bitcoin debit card that enabled cardholders to use the cryptocurrency for everyday purchases.
Bitbond – FinovateEurope 2015 – Berlin, Germany’s Bitbond offers a global P2P bitcoin lending platform that enables anyone with an Internet connection to both get loans as well as invest their savings for interest. The company demonstrated its AutoInvest functionality, which facilitates and automates fund allocation in a portfolio, at FinovateEurope 2015.
itBit – FinovateSpring 2015 – New York-based itBit demonstrated its bitcoin trading platform at FinovateSpring in 2015. The company’s technology enables both institutional and retail investors to buy and sell bitcoin. Rebranded as Paxos in the fall of 2016, the company has since highlighted its work in private blockchains and distributed ledger technology.
Blockstack.io – FinovateFall 2015 – Best of Show winning Blockstack.io offers a hosted and licensed enterprise blockchain platform that enables financial services companies and others to build applications on their own private blockchain. The San Francisco, California-based company, founded in 2015, was acquired by Digital Asset Holdings for an undisclosed sum before the end of the year.
ArcBit – FinovateFall 2015 – With a pledge to leverage bitcoin and blockchain technology to bring banking to the underbanked, ArcBit, which made its Finovate debut at FinovateFall in 2015, offers a mobile wallet specifically designed to give bitcoin owners full control over their cryptoholdings.
Coinalytics – FinDEVr San Francisco 2015 – Our developers conference, FinDEVr is one way that many bitcoin and crytocurrency innovators were able to bring their innovations to the public. Coinanalytics, which offers an end-to-end intelligence platform for the bitcoin industry, is an example of the kind of company developing solutions to make bitcoin a better opportunity for payments, financial services, and IoT.
BlockCypher – FinDEVr Silicon Valley 2015 – Another alum of our developer’s conference, BlockCypher offers companies a cloud-optimized, enterprise-grade blockchain platform that enables them to build reliable blockchain apps. Headquartered in Redwood City, California, the company was founded in 2014.
Gem – FinDEVr Silicon Valley 2015 – Founded in 2014 and based in Venice, California, Gem demonstrated its API which provides a comprehensive security solution for bitcoin apps – without taking control over funds. With a few lines of code, Gem enables developers to provide an interface to their bitcoin apps that gives users better funding options.
Ledger – FinovateEurope 2016 – Headquartered in Paris, France and founded in 2015, Ledger designs trusted hardware solutions for bitcoin and blockchain apps. The company’s solutions, including the Nano X and Nano S, provide cryptocurrency owners with a secure, portable way to take and manage their digital assets wherever they are.
Stratumn – FinDEVr New York 2016 – Enterprise blockchain technology company Stratumn provides firms with the infrastructure and tools they need to to build, deploy, and run blockchain. The company presented the high performance, proof-of-existence engine of its development platform at our developer’s conference in 2016. Jerome Lefebvre took over as CEO of the company from co-founder Richard Caetano in the fall of 2019.
Plutus.it – FinovateEurope 2018 – London-based Plutus demonstrated its Tap & Pay and Debit Card solutions that enable consumers to pay with bitcoin or Ethereum at any contactless point of sale. Founded in 2016, the company currently supports more than 26,000 Plutus accounts and credits its users for acquiring more than $100,000 in rewards via its Pluton Rewards program.
Amber Labs – Finovate MiddleEast 2019 – Best of Show winner Amber Labs is a bitcoin exchange, wallet, and micro-investment app in one. Headquartered in Brisbane, Queensland, Australia, and founded in 2017, Amber Labs offers a mobile first, automated investment platform for retail customers looking to buy and sell bitcoin.
When we asked a dozen-odd fintech founders and CEOs what they thought was a bigger deal: AI or Bitcoin, during our FinovateFall 25 in 5 Q&A series, the number of respondents more excited by the former than the latter was sizable. But bitcoin fans made their preference known, suggesting that the brightest days for cryptocurrencies were definitely still ahead of us.
We suspect those bitcoin bulls were buoyed by this week’s news that digital payments company Square has invested $50 million in bitcoin. The approximately 4,709 bitcoins purchased by the San Francisco, California-based company represent a fraction of Square’s total assets – around one percent, as of the end of Q2 2020 – but it is not the first time the company has expressed interest in the cryptocurrency. Via its Cash App, Square has offered bitcoin trading since 2018, and a year later, the company launched Square Crypto, a unit dedicated to supporting open source work on bitcoin. But this week’s investment marks the firm’s first financial investment in BTC.
Square CFO Amrita Ahuja explained the investment in part by expressing optimism about bitcoin’s adoption worldwide, saying that it has “the potential to be a more ubiquitous currency in the future.” Ahuja added that Square anticipated participating in the adoption of bitcoin “in a disciplined way.”
It is likely worth noting that Square founder and CEO Jack Dorsey is a big supporter of bitcoin. In 2018, Dorsey said he believed bitcoin – or a similar cryptocurrency – would become the world’s single currency at some point in the not-too-distant future. CNBC’s coverage of Square’s investment noted that other tech-savvy fintechs, such as Chamath Palihapitiya’s Social Capital use cryptocurrencies like bitcoin as a hedge.
As the Black Lives Matter-inspired social justice movement swept through the Western world this summer, corporations went into overdrive with efforts to show their support for ending racial discrimination. Many of these initiatives were outwardly directed toward potential customers, potential future employees, investors, the media, the public at large … But many of these attempts to show support were more inwardly directed, with companies encouraging their own workers to make their concerns with regard to social justice issues known – even, if not especially, in the workplace.
Unique among this trend was Coinbase, whose CEO Brian Armstrong not only took a different tack to politics in the workplace, but also put the company’s money behind its Keep Your Politics to Yourself policy. Armstrong made headlines weeks ago when he wrote in a blog post that, because Coinbase was a “mission-focused” company, “We don’t engage here when issues are unrelated to our core mission, because we believe impact only comes with focus.” Moreover, he added that if employees disagreed with Coinbase’s policy of leaving politics at the front door, he was happy to offer them a relatively generous severance (including up to six months of pay depending on tenure) if they decided to leave.
“Life’s too short to work at a company that you are not excited about,” Armstrong wrote, requesting his employees decide whether to stay or go by the end of September. And with Armstrong’s Wednesday deadline come and gone, it appears that 60 workers, approximately 5% of the Coinbase’s workforce, have taken the deal.
The move has been controversial, with others in the technology community – including Jack Dorsey of Square and Twitter – suggesting that a healthier environment could be achieved if companies like Coinbase embraced the challenge of these kind of conversations. But, at this point, Armstrong seems at a minimum happy that the policy did not result in what would have easily been the worst possible outcome. “I’ve heard a concern from some of your that this clarification would disproportionately impact our under-represented minority population at Coinbase,” Armstrong wrote in a follow-up blog post. “It was reassuring to see that people from under-represented groups at Coinbase have not taken the exit package in numbers disproportionate to the overall population.”
It will be worth watching to see if other companies – in or out of tech – take a similar strategy.
You’ve probably heard that cryptocurrency exchange platform Coinbase is considering going public later this year or early next year.
But this likely won’t be a traditional fintech IPO. That’s because the California-based company’s culture is rooted in the blockchain, a technology that embraces alternative finance. Furthermore, Coinbase would be the first major U.S. cryptocurrency exchange to go public, and the fintech community will be paying close attention to the outcome.
That said, there are some roadblocks Coinbase may encounter on its journey to Wall Street.
First, in order to go public, the transaction would need to be approved by the U.S. Securities and Exchange Commission (SEC). The hurdle here is that while the SEC has issued guidance on cryptocurrencies, labeling them as securities that are subject to regulation, the organization hasn’t issued guidelines on specific coins, except for a few. In fact, many mainstream financial institutions are wary of cryptocurrencies and see them as a tool for money laundering and illicit activities.
Coinbase will also need to decide how it will be listed. The company can either undergo a traditional IPO that caters to Wall Street investors, take a direct listing approach, or go public via a token offering on the blockchain. While involving the blockchain may be a logical approach for a blockchain-based company, it may cause difficulty, as even a hybrid model would need to be approved by the SEC.
Coinbase must also balance the cryptocurrency market itself. As Laura Shin points out in her podcast Unconfirmed, Coinbase will likely try to time its public debut with the cryptocurrency market, which is known for its volatility. Debuting during a dip in the cryptocurrency market may result in Coinbase receiving a lower-than-expected initial stock price.
