Coinbase shifts focus towards crypto-enabled banking services
In a recent tweet, Asheesh Birla, former CEO of RippleNet, revealed that Coinbase is transitioning from a traditional crypto exchange to a crypto-enabled banking service. The company’s new mission is to build a more fair, accessible, efficient, and transparent financial system enabled by crypto.
This move comes as no surprise as Coinbase’s Q1 2023 earnings transcript shows that revenue from deposits via interest income, blockchain rewards, and custodial fees now make up the majority of its revenues. Interest on USDC deposits alone generated $199 million, which accounts for around 18% of all Coinbase revenue.
Coinbase’s revenue stream is also shifting from consumer to high-margin institutional customers, with institutional trading revenue increasing by 67% from last quarter. Furthermore, the company benefits from banking-like revenues that are less dependent on the overall crypto market.
3/Per its Q1 2023 earnings transcript: revenue on deposits via interest income, blockchain rewards, and custodial fees now make up the lion share of Coinbase revenues. Shown as subscription and services revenue below… pic.twitter.com/6uEGcYSq8D
— Asheesh Birla (@ashgoblue) May 5, 2023
With trust in traditional banking eroding, the timing seems right for institutions and consumers to turn to alternatives. Coinbase’s move to crypto-enabled banking services could provide a viable alternative to traditional banking, offering a more transparent and efficient financial system.
As the world continues to embrace the use of digital currencies, it’s not surprising that companies like Coinbase are shifting their focus towards building a more crypto-enabled financial system. With this shift, Coinbase aims to become more than just a crypto exchange but a platform for the future of finance.
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