Cryptocurrency exchanges are continually expanding and changing their offerings as the platforms become more popular and exchanges learn what their clients prefer.
The growth of Bitcoin trading has influenced the overall popularity of crypto trading. One of the leading exchanges, Coinbase, is exploring its options as it seeks to expand its token offerings for crypto traders.
Expanding options and tools on the exchange platform
The San Francisco based crypto exchange is reportedly working on issuing a proprietary exchange token for its clients. Kayvon Pirestani, Coinbase’s head of institutional sales in Asia said that an initial exchange offering (IEO) platform is one of the projects the exchange is working on as part of many capital-formation tools.
Pirestani made the comments during a panel discussion about the changes in cryptocurrency capital formation. The panel was part of Coindesk’s Asia: Invest conference.
Pirestani went on to add that there is an interesting opportunity for Coinbase as far as an IEO platform goes.
The head of institutional sales said that the exchange firm is looking at the IEO space and they are also exploring security token offerings (STOs), but he could not make an official announcement about these options.
IEOs growing in popularity
Several crypto exchanges are beginning to use IEOs for their cryptocurrency crowdfunding. Some of the top 10 cryptocurrency exchanges such as Bitfinex, OkeX, Binance, and KuCoin have employed IEOs for some of the token offerings which have been executed on their platforms.
This method of crypto crowdfunding is being used to replace initial coin offerings (ICOs) which are problematic for many regulators across the world.
During an IEO, an exchange acts as a trusted broker during the sale of tokens. The exchange launches its proprietary token, which is then used to execute the sale of the token that is being offered.
The exchange would have to handle all the issues pertaining to know your customer (KYC) and anti-money laundering (AML) regulatory compliance on behalf of the startup offering its tokens. One example of a proprietary token is Binance’s BNB token.
Coinbase and securities
In July 2018, Coinbase obtained regulatory approval allowing the firm to acquire many securities firms that have broker dealer licenses. Coinbase has acquired Venovate Marketplace, Keystone Capital Corp., and Digital Wealth LLC.
When asked about Coinbase’s plans regarding securities, Pirestani said that the firm acquired the broker dealer licenses, but they are still considering all their options regarding the direction they will take with securities.
He went on to point out that there is a lot of talk about STOs, but it is yet to translate to demand on the market and Coinbase will wait until they are certain that there is enough demand for this offering.