Coinbase to Add Support for Ethereum ERC20 Token Standard
By Josiah Wilmoth
Ethereum-based tokens are finally coming to Coinbase, though it remains unclear exactly when that will be.
The San Francisco-based cryptocurrency brokerage and trading platform made the announcement in a Monday blog post, revealing that the firm’s development team would begin working to add support for the ERC20 technical standard, which is the smart contract specification used to build most Ethereum-based tokens.
Significantly, though, Coinbase stressed that it had not decided to support any specific assets yet, only that it intended to support the ERC20 technical standard.
Indeed, the timing of the announcement may be connected to the impending launch of Coinbase Custody, the firm’s institutional storage service, which the company has said “will likely support more assets than those available to trade” on its brokerage and exchange platforms.
Coinbase also did not specifically state that it would support tokens created through token generation events (TGEs). Though most well-known ERC20 tokens are the product of TGEs, these assets do not require a token sale.
Earn.com, for instance, is developing an ERC20 token that it will use to pay users for answering emails and completing other microtasks, and it has stated that it will not hold a TGE. Coinbase, incidentally, is rumored to be in talks to purchase Earn.com in a deal that could exceed $120 million, a report that emerged shortly before the company announced it would support the ERC20 token standard.
Whether the company ultimately lists TGE tokens will likely depend on regulators providing clear guidelines on how to determine whether a token is a security.
In written testimony submitted to a recent US House subcommittee hearing on cryptocurrencies, Coinbase said that a “lack of clarity” about the regulatory status of TGE tokens had caused the company to forego supporting these assets on its platforms.
“There is so much uncertainty about the definition of a security and the scope of regulatory control that the market is being chilled,” the company warned. “This is bad for everyone because the technology won’t stop — it will simply move overseas and we will miss out on the opportunity to cultivate the benefits in the U.S.”
Strategic Coin is a leading research and advisory firm for companies planning to integrate blockchain capabilities into their business model via utility token launches. Our customer research reports provide qualitative and quantitative analysis of token use cases and platform value. With the Strategic Coin Advantage network of partners, we offer customized services for the pre-launch, full-launch, and post-launch phases of Token Generation Events (TGEs).
Featured Image from Steven Heap/123RF
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