Coinbase has announced that its Custody service has completed the very first over-the-counter (OTC) trade transacted directly out of its cold storage.
The exchange noted in a blog post published on Wednesday, March 13, that the trade happened after it integrated the Custody service with the OTC desk.
The over-the-counter service for institutional investors is available at the firm’s Coinbase Pro platform.
According to Coinbase, the successful trade is a major breakthrough for its clients, one that means access to instant liquidity.
To access assets, clients have previously had to withdraw them from cold storage to an exchange “hot” wallet before executing a trade.
The process has meant that traders could be exposed to market conditions they did not anticipate because of the time it takes to get the funds onto the trading platform- sometimes up to 48 hours.
The news also means that Coinbase Custody clients will be able to leverage the OTC platform without having to move their funds from cold storage to an exchange. Accordingly, customers will purchase assets at an over-the-counter desk and settle them directly into Custody.
Coinbase revealed that the decision to integrate the two departments followed increased demand from its clients.
Coinbase Custody CEO Sam McIngvale said that customers wanted an offering that would allow them to trade but have the funds secure in cold storage.
He added that because Coinbase provides access to “the world’s largest regulated pool of crypto liquidity,” having quick and safe access to this market will greatly benefit its customers.
Coinbase launched the Custody service for institutional investors in May 2018, with the platform going live a month later. In October, the top U.S. exchange became a regulated crypto custodian after getting its license from the New York Department of Financial Services (NYDFS).
The approval allowed Coinbase to roll out services at its Coinbase Custody Trust and began offering crypto custody services for top cryptocurrencies, including Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum classic (ETC), Litecoin (LTC) and Ripple (XRP).
The move to integrate custody and OTC isn’t a new idea, given that many of Coinbase’s competitors in this sector have already begun offering the same functionality. The goal is to markedly increase the speed at which trades are settled while coins remain secured offline.
In January, Genesis Trading and custody provider BitGo partnered to allow their clients the opportunity to trade without moving digital assets from offline storage. A similar move is in place at the OTCXN desk that partnered custody firms Kingdom Trust and Prime Trust.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.