Coinbase and the Future of Stablecoins

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Coinbase has made serious progress in 2018 to solidify its position as the American leader of the crypto brands. Basically, Coinbase is the largest and most well-known place to buy, sell and trade cryptocurrencies in the United States. Now, it seems Coinbase’s next move is to turn its attention to the increasing buzz around stablecoins.

If citizens know what Bitcoin and Blockchain are, they may have heard of Coinbase, but are not as likely to have heard of the likes of Gemini, Kraken and Bittrex (or even Binance for that matter). Just as Uber and Lyft race to go IPO, it’s highly likely Coinbase and Robinhood will do the same.

The Rise of Stablecoins

Here is something I think is quite significant for the use case of stablecoins in 2018. As of October 23rd, 2018, the cryptocurrency giants Coinbase and Circle have formed a joint venture to improve the adoption of dollar-backed digital coins, usually called “stablecoins”.

Coinbase is likely worth in the area of $6 Billion nearing the end of 2018. However, with Fidelity, Bakkt and Robinhood making progress, they are more like a first mover than a major monopoly or anything similar.

Stablecoins could prove very useful in times of economic uncertainty and when national currencies face an inflationary crisis such as what occurred in Venezuela recently. This is basically the first time Coinbase has supported a stablecoin, which is fundamentally different from other cryptocurrencies. Unlike Bitcoin or Ethereum, a USDC is meant to represent a single US dollar (USD) that does not move up or down relative to its reference currency.

Since Coinbase aims to function as (a) the bridge between fiat currency and the future of tokenized companies, its ambitious approach is Silicon Valley’s hope to truly be a player in the future of digital assets.

Based out of San Francisco, California, Coinbase is probably the most well-known brand in the cryptocurrency space. Founded in 2012 and funded by Andreessen Horowitz, the New York Stock Exchange, Y Combinator and others, Coinbase became the first company in the space to reach “unicorn” status.

As for the stablecoin in question; USD Coin was first introduced by digital payments company Circle shortly after it purchased the Poloniex exchange. The stablecoin, which is fiat-collateralized, was developed by the Centre Blockchain Consortium, an entity that Coinbase co-founded with Circle. As new kinds of convergence and collaboration take place, different classes of altcoins are gaining in momentum. The underlying technology behind the USDC was developed collaboratively between Coinbase and Circle as partners and co-founders of the CENTRE Consortium.

Coinbase has been hiring a lot of talent in 2018 as well as launching new initiatives at a frantic pace, read the blog here for more information. Just as Bitmain and Binance are evolving as crypto speed, Coinbase will be a very interesting company to watch in 2019.

According to CNBC, Coinbase may be valued as high as $8 billion. Stablecoins such as USDC may increase the adoption of digital assets, since stablecoins such as Tether remain crowded in controversy and fail to remain at a one dollar value on a consistent basis.

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