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XRP is now a resource supported by Coinbase Custody, which suggests that institutions put more trust in assets. Coinbase Custody lists XRP as one of nine resources supported for its service. Although the exchange did not reveal exactly when it added the remittance and settlement token, it came to the attention of the industry early in the morning.
The XRP is one of two resources – the other is OmiseGO (OMG) – supported by the custody solution, but which currently can not be traded on the stock exchange. Coinbase Custody also chose to use the Ripple logo, rather than the XRP logo. That this has some significance is questionable, but the public relations campaign underway to distance the XRP token from Ripple Labs does not seem to find traction at Coinbase.
So far there has been no official news from Coinbase Custody about XRP support; its pages on social media are relatively inactive. In a blog post, published at the beginning of August, the service said that it was currently exploring the addition of over 30 new assets to its solution. In addition to the XRP, other coins included EOS, Dash and NEO. Interestingly, Coinbase Custody chose to use the actual XRP logo in this blog post:
Coinbase Custody is a service at an institutional level that provides secure space for virtual currencies. Its first deposit was accepted in the summer, and the service uses a mix of cold-walled storage, as well as broker dealers and reporting services. Deposits are fully insured against theft.
XRP Coinbase Custody
Speculation has already begun on what is the addition of XRP for the resource. The other supported resources are all widely tradable in the fiat-to-encrypted exchange of the company.
Some have suggested that today's move shows Coinbase responding to a growing institutional appetite for assets, other than bitcoin (BTC) or Ether (ETH). Nelson Ryan, Asia-Pacific manager at the Reserve, an investment bank, said he had shown a shy first step towards greater interest in XRP.
"The fact that Coinbase is offering the safekeeping of assets for institutional investors before offering it on its sales platform says a lot about the real potential risks that keep on seeing that XRP can be considered a security" Ryan said. "At this stage it shows only a request for a wider range of products and resources for investments and speculations".
The problem is that the legal status of the XRP has yet to be decided. The creator of the resource, the supplier of fintech Ripple Labs, has been accused by some critics in America to offer the token as security not registered during the sale of tokens in 2014. If the federal courts rule against Ripple, the XRP it could lose much of its practicality as a means of liquidation.
Legal ambiguity does not become a cryptocurrency. Coinbase does not take risks. A lawyer specializing in virtual currencies highlighted a Crypto Briefing that the reputation of the exchange as the "Cautious in cautious exchanges" it meant that it was unlikely to take the decision of the court into consideration.
A custody solution can be used to store anything – currencies or securities – so regardless of the final ruling, Coinbase would be able to legitimately store XRP for its customers.
Make a ripple; not a wave
Coinbase dominates the sector. Based in San Francisco, it is one of the most popular cryptocurrency exchanges in the world. At the last count, more than $ 150 billion has been traded through its servers since it came into operation in 2012. Coin-listed currencies have the habit of increasing in value. The Basic Attention Token (BAT) saw more than $ 50 million added to its market capitalization when it was listed at the beginning of November.
The market collapsed yesterday. More than $ 20 billion have been canceled in the last 24 hours. This publication suggested that this is a response to the Bitcoin Cash (BCH) fork, which takes place later today.
At the time of printing, XRP had begun to level off. Being added to the Coinbase custody solution shows the exchange values of the asset. With that said, the associated costs place this service well above the reach of all but the richest retail investors. More importantly, Coinbase's custody and exchange operate as separate entities. This may be an attempt to approach the XRP, but the current legal uncertainty makes it an unlikely resource to list.
Today there will be a wave of excitement among XRP owners. But it will be on this.
The author is invested in BTC and ETH, which are mentioned in this article.
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