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Coinbase Changing The Listing Rules. It Strives To Be The Next Nasdaq

Daria Piotrovskaya

The American Currency Exchange Coinbase officially announced changes in listing rules. In order to understand the scale: on the platform Coinbase there are about 30 million cryptocurrency wallets registered. The net profit of the crypto gigant last year was more than $1 billion, the number of clients as of September 2017 - almost 10 million people. Since its inception, the crypto exchange has served more than 20 million users. The total amount of exchange of digital currency exceeds $150 billion.

At the same time, the company has always been distinguished by a cautious approach, one can even speak of conservatism and some sluggishness. But the events of recent months, the statements of the management of the exchange show that its policy is changing. And, quite swiftly. The Exchange is consistently moving towards increasing the number of customers and, despite the criticism of some experts, is not afraid of mistakes.

Coinbase supports, as you know, five digital currencies - Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic and Litecoin - but in the foreseeable future their number will grow significantly. Back in July, Coinbase announced that it was considering adding digital currencies as BAT, Cardano, Stellar, Zcash and 0x, and in August mentioned that there were 37 candidates for listing new assets.

Opening the way to less popular currencies and giving every developer the opportunity to send an application for adding his asset, the crypto-exchange is meeting the wishes of the users. The digital market is diverse. The number of exchanges is also growing steadily, they are competing to offer customers the most attractive conditions. I wonder if other sites will follow the example of Coinbase, changing their listing rules?

Everyone becomes a customer of Coinbase

Speaking about the creators of the first two crypto-currencies that appeared on their stock exchange, the technical director of the crypto-exchange, Balaji SRINIVASAN, noted: "Satoshi and Vitalik were not customers of Coinbase. But all future and existing creators and developers of assets will become them. Thus, we are becoming a two-way marketplace". According to SRINIVASAN, the main criterion for listing an asset is demand in the market. "There are three main questions: does the asset violate the law? Is it technically safe and innovative? Do our customers want to see it?" - specified the technical director of Coinbase.

The reason for the changes in listing rules was a large number of applications of users and customers of the exchange. And the task of this process, apparently, is to add in the shortest period of time the largest number of assets that meet the standards of the exchange. "The application form and the digital infrastructure of assets will be regularly updated," the company's blog says. When applying an admission fee is not charged, but in the future, obviously as costs increase, Coinbase reserves the freedom to change this rule.

Announcements about new tokens will be published at the time of launch or closer to this point. Experts began to analyze the first consequences of changing the rules. Among market participants, there is an opinion that the innovations of Coinbase led to an increase in the cost of XRP by 11%.

We want to be a bridge for people from all over the world

At the conference held by TechCrunch, Brian ARMSTRONG, the general director of the company, outlined the ambitious goals of Coinbase - making the crypto currency titanium an analogue of the New York Stock Exchange in the world of digital currencies. One more comparison is coming up: with Nasdaq, one of the largest stock exchanges that specializes in high-tech companies. It is interesting that Nasdaq, in turn, expressed its readiness to become a crypto exchange. The management of the company announced the release of digital assets to the market in April this year.

On the example of these two exchanges, one of the latest trends in the economy is evident - the interpenetration of the digital world and the world of fiat money. Their institutions, despite all the differences, compete in the future, learn from each other, and everyone wants to get what the other has.

According to the Blockchain Business Development Executive, US Financial Services Market at IBM Shiuh-Wuu (Victor) Liu, "This will strengthen competition between exchanges, and they will be one hack away from serious financial problems. It's too early to determine the winner in the digital space.”

"We want to be a bridge for people from all over the world, so that they can use Fiat to buy any cryptocurrency,"ARMSTRONG said at the above-mentioned conference. And like Noah in the ark, he continues to attract new digital assets to the stock exchange. The main thing for Coinbase is that these assets meet the standards and safety requirements.

According to the new rules published on September 26 on the exchange's website, any developer can send an application for the addition of crypto-currency into the register. To do this, you need to fill out a form. The selected tokens will go to the stock exchange.

In accordance with the innovations, access to them will not necessarily be open to all. The administration reserves the right to add some assets independently - without an application. In general, it is difficult to judge how strict the new rules are, until it becomes clear how the tactical move is being implemented. A number of market participants consider the requirements of the exchange to be difficult.

In the center of the updates there is a new online application tool developed by Coinbase presented. Until then, there was no formal mechanism for this purpose in the company. Many organizers urged the exchange to add their digital currencies.

The most flexible - those who were born in the era of the blockchain

“It’s not our position to speculate on why Coinbase have updated their listing rules, or the timing of the announcement. Particularly since they haven’t actually added any new listings off the back of it,” - said Dmitry TOKAREV, CEO of the British financial company. - “Though it is worth exploring the topic on a macro level. There is a certain lack of cohesion among exchanges, owing in no small part to the fact they are globally dispersed and regulations are fragmented between jurisdictions, and in many cases within jurisdictions.

Creating a formal method of submitting requests for additional assets to be added to the platform, as opposed to what is historically more common in crypto (ranting on reddit), doesn’t seem like much of a revolution.

Other exchanges operate slightly more market-driven approaches, such as Ethfinex which encourages users to vote. But this method isn’t without its own pitfalls, namely it requires converting assets to voting tokens, which would suggest the token creators with the deepest pockets will get listed.

If crypto is to be the great equaliser in finance, then more exchanges need to sign up to a uniform process of vetting and listing assets. It requires global regulation.”

And here is the opinion of Daniel HAUDENSCHILD, CEO at Swisscom Blockchain AG from Zürich: “The most important sentence in the new framework, "The asset is not classified as a security using Coinbase's Securities Law Framework." It's a checkbox. All the rest is prudent self governance. As the trend turns clearly from utility token to asset backed token and security, does this mean that Coinbase will not accept any non-us tokens in those categories? That means remaining blind to a large portion of the global asset base. I am not entirely sure that centralised exchanges will hold the advantage for long.  They become a regulatory and hack honey pot, and between loss incidents they yield too much influence. I also don't see that an established companies have an advantage over new starters. The ones born in blockchain are often more agile and can keep up with the speed of the industry. The ones who adopt the blockchain, and weren't born in it, often are slow to market and build their own market barriers trying to apply what they know to the blockchain.

So in the battle between the centralised exchanges, Coinbase has a great chance.  I think however, that before long, some of the second stage protocols will change the whole industry. Swaps architectures launched from protocols like lightning and plasma and 0x will be the place to watch.”

It is worth noting that now the listing of cryptocurrencies and tokens will be conducted not simultaneously in all countries serviced by the exchange - but in jurisdictions. This means that in those places where the law prohibits trading in digital currency or does not welcome it, traders will not be able to take part in crypto rotation.

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