Coinbase is always evolving as a cryptocurrency exchange. Similar to other companies in the industry, the platform cannot afford to stand still. Its latest move has taken a lot of people by surprise and even seems to have caused a fair bit of outrage. Moving forward, Coinbase will support ERC20 tokens, which opens up a lot of new opportunities.
ERC20 Support Comes to Coinbase
It is evident the Coinbase platform wants to keep expanding its range of supported currencies. Doing so will be quite a challenge, as there are tons of currencies and tokens to choose from these days. All of this makes the decision to back Ethereum ERC20 tokens all the more intriguing and worrisome. Some users are genuinely concerned about this development, even though there is no real reason why it should cause major problems right away.
More specifically, Coinbase made it clear they intend to support the ERC20 token standard in the coming months. As such, it seems safe to assume the trading platform will integrate support for all ERC20 tokens in the future. Whether or not this will be done manually or automatically is something that remains to be determined. Anything is possible in the cryptocurrency industry, although there are so many tokens which serve no real purpose as of right now.
Since ERC20 is a technical standard first and foremost, it seems logical that exchanges will pay more attention to it. At the same time, developers have been working on a brand-new token standard which is more effective and secure. It is unclear if Coinbase will also support that new standard in the future.
The integration of ERC20 support will also affect all of the products and services provided by Coinbase. For now, the site’s custody team is contemplating which set of assets they want to support for deposits and withdrawals. This seems to indicate we may see some new tokens get listed on the exchange very soon, although it is anybody’s guess as to which tokens they might be. It would be interesting if the Coinbase team based its list on current utility rather than speculation and hype, but that seems highly unlikely.
Additionally, GDAX will also enable support for the ERC20 standard and its associated tokens. However, they will not do so until regulatory clarity is provided to ensure which tokens can be supported. Given the fact that so many tokens are technically securities, it is only normal that caution is advised at all times. We may not even see the same tokens listed on Coinbase and GDAX, which is certainly something to keep an eye on.
Whether or not the general cryptocurrency community will take a liking to this new course of action remains to be seen. So far, it seems a lot of people are hesitant to trust Coinbase with their tokens, which is only normal. Any centralized exchange requires trust, regardless of the currency being used. The bigger question is whether or not this is a positive development for the ERC20 token industry as a whole. More market liquidity is always good, but it will mainly depend on which currencies are ultimately supported.