Crypto: Coinbase scores big win over rivals
Coin base (COIN) have reasons to smile, even as much of the rest of the cryptocurrency industry does not.
The big picture of crypto is bleak even as players in the cryptosphere reiterate that they are the future of financial services.
Investors seem focused on the present, and the present reflects fears of a possible recession prompted by the Federal Reserve’s rate hikes designed to crush a 40-year high inflation rate.
Experts say that one of the consequences of the policy, and potential so-called hard landing for the economy, is that investors liquidate risky assets, which are often invested in growth.
Cryptocurrencies and other crypto-financial products, such as non-fungible tokens, are a central theme of this investor distrust.
The cryptocurrency market has thus lost more than $2 trillion from the $3 trillion record reached in November 2021, according to CoinGecko.
This fall in the valuation of digital currencies directly affects the platforms on which they are traded. These include Coinbase, which capitalized on cryptomania at its peak in 2021.
Coinbase shares have fallen 73% since January, shedding $48.4 billion in market capitalization.
Notably, however, Coinbase shares managed to rally in the third quarter. In the period from July to September, Coinbase’s share price rose 37%.
And the firm just received an approval that could help it continue that momentum.
Coinbase succeeds where Binance failed
Coinbase has just received a license from the Singapore government to offer crypto services on the island. Coinbase thus gained a leg up on its rival Binance, which last February withdrew its application to operate in the country.
Binance had explained that the authorities in Singapore were too demanding.
The Monetary Authority of Singapore, the local financial regulator, authorized Coinbase to offer regulated digital payment token products and services, the firm said in a statement.
“Singapore has a long history of embracing innovation, positioning itself at the forefront of the financial and technological revolution,” Nana Murugesan, Coinbase’s vice president of international and business development, said in a blog post.
“We look forward to ongoing collaboration with the government on a pragmatic digital asset regulatory framework, to empowering local and regional developers as they scale use cases, and to continuing to support efforts to consolidate the island nation’s position as a global Web3 hub.”
Web3 is the new iteration of the internet, which aims to be decentralized, giving users control over their data.
Coinbase is already present in Singapore, setting up an Asia-Pacific hub there to offer crypto-related services to local institutional investors. It continues to expand internationally as part of its growth efforts.
It is very difficult to get a license from the authorities in Singapore. Coinbase thus joins a very tight circle including Crypto.com, Luno and Paxos.
The island, which is a financial center and has a very favorable tax regime, is very popular among players in the crypto industry.
