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Coinbase Considers Alternative Banking Model

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Coinbase Considers Alternative Banking Model

According to reports, Brian Armstrong, the CEO of Coinbase, said in response to Ryan Lacey, the chief strategic officer of Evertas, a crypto asset insurance company, that after the collapse of the Silicon Valley bank, Coinbase considered selecting a “high net worth+new commercial bank” model, “transferring assets to community banks and reserves”, but needed to provide more functions, such as fund wire transfer outbound, multi-user support, etc, Brian Armstrong also said that “non-partial reserve banking” now looks more attractive.

Coinbase CEO: considered “transferring assets to community banks and reserves”

Analysis based on this information:


Coinbase is a digital currency exchange platform that allows users to buy and sell various cryptocurrencies. It has been on top of the market since its establishment in 2012, and it still continues to be a leading digital currency exchange today. However, like any business, it has faced its fair share of challenges, particularly in the area of banking. Brian Armstrong, the CEO of Coinbase, recently revealed that the company considered an alternative banking model after the collapse of a Silicon Valley bank.

In response to Ryan Lacey, the Chief Strategic Officer of Evertas, a crypto asset insurance company, Armstrong discussed the challenges facing Coinbase in terms of banking. One of the challenges he mentioned was the issue of deposit insurance. Due to the fact that cryptocurrencies are not backed by a government or other financial institution, they cannot be protected by deposit insurance. Hence, Coinbase considered selecting a “high net worth + new commercial bank” model as an alternative. This would involve transferring assets to community banks and reserves, which would provide some sort of protection against losses.

However, Armstrong also stated that this model came with its own set of challenges. Coinbase needed to offer more functions, such as fund wire transfer outbound and multi-user support, in order to make this model work. Furthermore, he noted that non-partial reserve banking appeared to be a more attractive option. This model allows banks to use a fractional reserve system, where they only keep a fraction of the deposits on hand as reserves, and loan out the rest. This enables banks to earn more money on their deposits, but it also increases the risk of a bank run.

In summary, Coinbase is exploring alternative banking models to protect its assets and ensure the continued success of the business. The high net worth + new commercial bank model is a viable option, but it needs further development to be effective. Non-partial reserve banking is another attractive option, but it comes with its own set of risks. Coinbase must weigh the pros and cons of each model and select the one that works best for their needs.

In conclusion, this message highlights the importance of banking in the digital currency space and the challenges that come with it. The title “Coinbase Considers Alternative Banking Model” and the keywords “Coinbase, alternative banking, reserve banking” accurately summarize the main points of the message.

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