Coinbase Announces Custody Plans for 40 Digital Assets, Including XRP

August 3, 2018, 8:52 PM UTC

As cryptocurrency becomes more mainstream, pension funds and other big institutions are seeking to add it to their portfolios. This represents a potential opportunity for investors but also a new business line for the likes of Coinbase, which charges funds to be the custodian of their crypto assets.

On Friday, Coinbase announced it is exploring plans to expand its custody service to include 40 more assets, including XRP, which is the third biggest cryptocurrency by market cap.

Institutional funds are required by law to use a custodian to hold their assets and protect them from theft. In return, the custodians charge a fee to keep the assets secure.

Currently, Coinbase acts as a custodian for four types cryptocurrencies—Bitcoin, Bitcoin Cash, Ethereum Litecoin—and charges 0.1% a month in addition to a $100,000 set-up fee, according to information the company provided late last year. Customers of the custodian service must store at least $10 million.

Among the other notable cryptocurrencies that Coinbase plans to store are Monero, Dash, Tezos and Telegram. Here’s a screenshot showing these and some of the others:

By adding new crypto assets, Coinbase is poised to increase its revenue from custody services. This is significant because a growing number of companies are offering cryptocurrency trading, which has been a lucrative business for Coinbase, but where margins are likely to drop in the future.

A Coinbase spokesperson declined to provide a specific timetable for when exactly the custody support for the new assets will be available. The company also says plans to add all 40 of the assets are not definitive.

Coinbase is not the only cryptocurrency company to offer custody (another is Boston-based Circle), and it does not sell many of the assets it plans to store as a custodian. As such, it’s unclear how much the expansion of its custody offerings will boost Coinbase’s revenues.

Currently, Coinbase counts the funds Autonomous Partners, Polychain Cap, and Multicoin Cap among its custody customers. The company says it aims to have more than 100 institutional customers and store at least $20 billion under custody by the end of 2019.

Meanwhile, Coinbase also disclosed on Friday that traders will be able to buy and sell the asset known as Ethereum Classic beginning on Tuesday. The move comes after the company announced in June it would add the cryptocurrency, which is currently the 14th biggest, according to the site CoinMarketCap.