Coinbase may finally be ready to list Ripple XRP, a move that the exchange giant has avoided with various rationale over the years. In a major pivot, Coinbase now wants to list “90%+” of all cryptocurrencies – at least, the ones that meet its new Digital Asset Framework.
Ripple XRP isn’t alone. There are more than 30 cryptocurrencies which Coinbase is publicly considering. The class of coins includes heavy hitters like NEO, EOS, Cardano ADA, and Maker MKR. Ripple is one of the more controversial entries. XRP may end up being labelled a security by the American Securities and Exchange Commission, a move which would make the original XRP sale retroactively illegal.
However, Ripple Labs seems confident that this will not be the case. The SEC has already ruled that Ethereum is not a security, and Ripple shares with Ethereum many of the criteria that made the SEC make this determination. Perhaps Ripple’s best argument against security status is that XRP is used (millions of times a day) as a currency, traded against dozens of other world currencies for all kinds of payments and transactions.
Coinbase exchange, it would seem, is reading the same writing on the wall. They avoided Ripple for years, because of numerous practical and political considerations. Perhaps chief among these is the fact that Coinbase is geared towards retail traders, while Ripple (as a product) mainly serves institutions.
Nonetheless, Ripple XRP is now the 2nd most valuable cryptocurrency in the world, having dethroned Ethereum from its longtime penultimate position. And even though Ripple is nominally a blockchain for the banking world, it’s now so widely traded among private investors that Coinbase can’t ignore it any longer. Simply put, adding Ripple XRP would bring business to Coinbase.
In this way, Coinbase likely needs Ripple more than Ripple needs Coinbase. Ripple XRP has been making enormous strides in the worlds of banking and business, even as other cryptocurrencies have tanked and stopped developing in this era’s protracted bear market.
Coinbase serves an international client base, but it’s still very much an American company at its core. Adding new currencies is a risky move, because the American regulators have been reticent to make a final decision on what so many of these cryptocurrencies actually are. By creating its own Digital Asset Framework, perhaps Coinbase hopes to set the tone for regulators – identifying digital assets with strong utility value, which don’t function as securities.
If Coinbase makes the wrong choice on one or more of these coins, it could be a major headache down the road. But delaying could make Coinbase irrelevant as popular altcoins become more widely available through its competitors. With a juggernaut like Ripple XRP on the table, perhaps Coinbase can’t afford not to act.