Coinbase, a major crypto exchange, has acquired the institutional business of Xapo a cryptocurrency wallet provider. This information was published by representatives of the platform on the official blog.
Why Coinbase Does Need Such A Deal?
The deal will allow Coinbase to expand the capabilities of its custodial business, while simultaneously increasing its assets over $ 7 billion. Coinbase CEO Brian Armstrong announced at the CoinDesk Consensus 2019 conference which held on May 2019 that $1 billion of assets received by Coinbase Custody are managed from 70 institutions.
As we know, the purchase cost the exchange $55 million. Another applicant that showed interest in acquiring Xapo’s business was the Fidelity investment giant.
Users reacted to the news positively. Some commentators spoke about their desire creating an account in Xapo’s service.
Xapo has already decided to transfer its cryptocurrency assets to Coinbase. As a result, the platform will store more than 514000 BTC for Xapo customers amounting to $5.3 billion.
Recall that Coinbase CEO Brian Armstrong had already discussed plans for the further development of the project. One of the key areas is to change the economic freedom of the world by building the crypto economy as a specialist outlined. Probably, a deal with Xapo seems like a part of the strategy.
Xapo Opens Up New Possibilities To Coinbase
Against the background of the deal, if Coinbase can connect the remaining Xapo customers, it will store more than 860,000 BTC in its custodian service.
According to Fortune media, the deal “could result in the San Francisco company storing over 5% of all Bitcoins in circulation.”
According to the head of Coinbase Custody Sam McIngvale, the crypto exchange will be able to engage in cryptocurrency lending soon. The specialist believes the first step meets the interests of investors.
Xapo project was launch in 2013 and has already gained growing popularity due to the provision of digital asset storage services such as wallet and physical storage located in Switzerland. The services of the latter are used by customers who want to create conditions for the offline storage of assets, in compliance with a high level of security.
“Xapo isn’t just an app, it’s a mission to help everyone in the world live a better life. It’s about breaking down barriers and opening new doors — it’s for everything that matters most.” – posted Xapo service on Twitter.
Xapo conducts activities following regulatory requirements. Therefore, the company was granted a New York Bitlicense and an E-money license by the Gibraltar Financial Services Commission.