Digital Assets: $500M Of Cryptocurrencies (Or More) To Replace Fiat On Coinbase’s Balance Sheet

August 20, 2021 | Digital Assets, News

Coinbase will also invest 10% of quarterly income into various crypto assets.

It’s a huge plug for the cryptoeconomy, which Coinbase (NASDAQ: COIN) envisions as a future where economic transactions would be based on crypto assets. CEO Brian Armstrong revealed today that the company’s board had approved the investment of a massive $500 million in crypto. Armstrong also said that going forward the company, which is the largest digital exchange in the US by trade volume, would invest 10% of its quarterly profits in crypto.

Coinbase Investment policy

Simultaneously, Alesia Haas, Chief Financial Officer (pictured above), gave details of the decision in a blog post.

The company had decided to set an example by converting at least some of Coinbase’s financials, which were overwhelmingly conducted in fiat currency, into crypto assets.

“We will become the first publicly traded company to hold Ethereum, Proof of Stake assets, DeFi tokens, and many other crypto assets supported for trading on our platform, in addition to Bitcoin, on our balance sheet,” she wrote.

Modus operandi

Haas revealed that the company’s crypto assets would be accumulated steadily over the long term to benefit from “dollar cost averaging,” and that these assets would only be divested in special circumstances. That situation could arise, for example, when a digital asset got delisted from the exchange’s platform.

Additionally, Haas was careful to confirm that the Coinbase investment operations would be conducted via “our over the counter desk or away from our exchange to avoid any conflict of interest with our customers.”

Interestingly, Haas also hinted that the company could increase these allocations in future “as the cryptoeconomy matures.”

Bitcoin price

The leading cryptocurrency is currently changing hands at $47,467, up 6.36% over the past 24 hours. Bullish news such as Wells Fargo floating a bitcoin fund, and the Coinbase investment announcement are likely fanning the bullish sentiments in bitcoin.

Related Story:   Coinbase Launches In Japan; Ties Up With Mitsubishi UFJ                                               

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