Coinbase adds ERC20 standards, future support all Eth-based tokens

Posted: 27 March 2018 11:10 am
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While no new coin listings have been announced, Coinbase's ERC20 support helps quicker additions later.

Coinbase has announced support for ERC20 technical standards, which may suggest much quicker additions of new coins in the future.

"We're excited to announce our intention to support the Ethereum ERC20 technical standard for Coinbase in the coming months. This paves the way for supporting ERC20 assets across Coinbase products in the future, though we aren't announcing support for any specific assets or features at this time," it announced in a blog post.

ERC20 is a technical standard for tokens on the Ethereum system. Just like trains all need to be the same width to run on the same tracks, cryptocurrencies need to meet certain technical criteria to run on the Ethereum blockchain tracks.

The ERC20 standard ensures much easier compatibility on a wide range of wallets and exchanges, and a degree of interoperability between tokens.

Coinbase wants to add more assets, coming soon

Coinbase is distinguished as one of the world's largest cryptocurrency exchanges, but it only offers a very narrow range of tokens, so far consisting of only Bitcoin, Ethereum, Litecoin and Bitcoin Cash. While no new digital assets have been announced for Coinbase yet, there's been a lot of speculation around future additions.

For example, some signs suggest that Coinbase plans to add Ripple, but there are also some reasons to believe that it will never happen.

It's clear beyond any doubt that Coinbase is hungry for more assets, but is currently holding off for fear of inadvertently listing a token that's later found to be a security.

"Part of the reason we trade only those four assets is that each has been determined by regulators to be a virtual currency and therefore not a security. We are studiously avoiding listing tokens that could be determined to be securities because we are not currently licensed to trade securities and cannot take the risk of inadvertently trading an asset that is later found to be a security," explained Coinbase legal head Mike Lempres to the US House Committee on Financial Services.

With the cryptocurrency regulation situation in the USA set to clear up in the near future, Coinbase seems like it's just sitting and waiting for the moment it can start adding more coins, and has built in ERC20 support in the meantime.

"Coinbase will only list assets after they are listed on GDAX. After evaluating factors such as liquidity, price stability, and other market health metrics, we may choose to add any ERC20 asset added to GDAX to the Coinbase platform. It’s also worth repeating that GDAX will likely have more assets listed on the platform than the Coinbase platform, i.e. listing on GDAX does not guarantee listing on Coinbase," Coinbase explains.

"The GDAX team will wait for additional regulatory clarity before we decide which ERC20 assets to support on GDAX."

"Per the index methodology, any asset listed on GDAX will be added to the Coinbase Index on a market capitalization weighted basis."

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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