Coinbase announces safe platform designed for institutional investors

Big money investors are being drawn towards cryptocurrencies such as Bitcoin and Ethereum. Considering the highly impressive rates at which digital currencies have been appreciating lately, this does not come as a surprise at all. However, some big companies and institutions still hesitate to invest in these currencies. With Coinbase’s announcement to launch 'Coinbase Custody', this situation is likely to change.

Institutional investors’ reservations are based on fears concerning the security of funds. Their fears are justified, considering the amount of loss a single hack experienced by a cryptocurrency exchange or wallet service provider can lead to. The most recent one took place in Parity Technologies’ wallets, which resulted in approximately $160 million worth Ethereum funds being locked.

Announced this Thursday, Coinbase’s new platform is designed to especially address security risks associated with cryptocurrency investments. The goal is to provide a trust-worthy system for major institutional investors in order to alleviate their concerns regarding the safety or legitimacy of their investments.

In a blog post on Medium, Coinbase CEO, Brian Armstrong, highlighted prominent features of this platform, including high levels of security on all stages, insurance when it’s required, strict financial controls, dedicated account representatives, and phone control. “We are designing Coinbase Custody to meet the needs of institutional clients," the post read.

Armstrong detailed that some $10 billion in institutional money is waiting to be invested in digital currencies and that only security concerns are standing in their way. Coinbase seems quite appropriate for this job, as the exchange is not only fully licensed as a digital broker, but is already holding about $9 billion in crypto funds. This shows that Coinbase already has many clients who have faith in its ability to keep their investments safe.

It is important for interested parties to realize that this platform is not for retail investors and has been specifically designed for only the big money investors. It will require an initial set up fee of $100,000, a minimum deposit of $10 million, and then a monthly storage fee as well.

The project is not ready for implementation just yet; the official launch will take place next year. It is not far-fetched to predict that the more than 100 hedge funds introduced last year will become potential Coinbase Custody customers, as the platform can provide them with the required extra security and legitimacy.