Coinbase, the US-listed crypto exchange, has integrated with Chainlink to scale institutional adoption of digital assets as chief financial officer Alesia Haas said crypto is becoming mainstream.

Haas spoke at the Goldman Sachs Financial Services Conference in New York on 10 December. She  explained that following the US election, the US now has the most favorable pro-crypto Congress and Senate that the country has ever had.

“There is an opportunity for us to get the legislation that we have long desired,” she added. “It  is a day that we have fought long and hard for, and gives us the opportunity to really focus on growth.”

She is hopeful that market structure rules will be put in place to allow institutions to offer tokenized crypto securities in the US.

On 10 December Coinbase said in a statement that Project Diamond, its compliant digital asset platform for global institutions, is adopting the Chainlink standard as infrastructure for powering the full lifecycle management of tokenized assets.

Project Diamond harnesses the Coinbase technology stack which includes custody, an onchain wallet and stablecoin USDC.Coinbase Asset Management is developing Project Diamond and initial use cases will be for registered institutional users outside the U.S. only. Peregrine, fund manager PSG Digital’s regulated business in Abu Dhabi’s institutional financial centre will be the flagship user.

Marcel Kasumovich, deputy chief Investment officer at Coinbase Asset Management, said in a statement: ”By integrating the Chainlink standard natively into the Project Diamond platform, powered by Coinbase’s tech stack on Base, we’re paving the way for widespread institutional adoption of digital assets.”

Haas continued that Coinbase is seeing broader participation than in past cycles, which were heavily retail, but crypto is now becoming mainstream with more institutions. Haas highlighted that after the US Securities and Exchange Commission approved spot bitcoin exchange-traded funds, and then spot ether ETFs, capital flowed into the market because institutions had regulatory clarity.

The consistency of positive daily flows for BlackRocks Bitcoin ETF (IBIT) is mind-blowing. pic.twitter.com/e7e5g2qQRy

— Philip Swift (@PositiveCrypto) December 10, 2024

In addition, she said corporates are beginning to talk about their crypto strategy, fintechs are entering the space and a number of stablecoin partnerships have come to market in the last three months which will attract more institutions.

Haas said: ‘It is very reminiscent of the 1990s when the question was ‘what is my internet strategy and how am I going to offer my bricks and mortar products online?’ Now the question is what is our onchain strategy?”

International expansion

Coinbase has launched in Canada, Brazil, Singapore and Australia in the last year and Haas said these operations cover their fixed costs. One of the key initiatives in 2024 was to bring the international markets into product parity with the US market.

“As we go into 2025, we will explore whether we want to go into new markets now that we have matured the first batch of international growth,” Haas said.

The company has focused on standing up both a US and international derivatives platform. Global crypto derivatives trading largely consists of perpetual futures, which are not approved by regulators in the US.

In the third quarter, Coinbase received a Mifid license so it is authorised to market derivatives in the European Union. The firm is in the process of getting that license integrated and live on its  platform, according to Haas.

Competition

This year Coinbase set goals of driving revenue, utility and legislation and Haas the firm has made a lot of progress against all three initiatives, which will continue going into 2025.

“We want to drive utility and this is probably the most important roadmap that we have,” she added.

If a regulatory framework for crypto is put in place, Coinbase is likely to face increased competition, including from traditional financial firms. Haas said the firm welcomes competition and believes it has the unique ability to enable competitors, who can use the firm’s developer tools.

“Crypto will will become like how financial services has grown up, with hundreds of banks around the US,” Haas said.

She argued that Coinbase is unique in its number of crypto engineers, people who deeply understand how to build onchain, and can support multiple protocols. Haas also said that building onchain transaction monitoring, and understanding how to identify suspicious transactions, takes time.

In addition, crypto consists of bearer instruments so that if the holder loses their cryptographic keys, the assets cannot be recovered. Haas said banks are good at physical security but do not know how to operate crypto custody, and do not know how to constantly balance global liquidity onchain.

“You have to learn how to do it chain by chain, asset by asset and we have 12 years of experience,” said Haas.

Coinbase custodies between 11% and 12% of global crypto assets according to Haa. The firm was also selected as a custodian by the majority of the  spot crypto ETF issuers after a rigorous due diligence.

“We feel really proud about the controls and the platform that we have built, and we believe that is a differentiator,” she added. “We have been competing on product, differentiated experience, trust, safety, custody and ease of use.”

She expects pricing will become more important with the growth of the ecosystem and commoditization.

M&A has been an important part of Coinbase’s strategy and Haas said there Is an opportunity to use the company’s strong stock price and accumulated cash for deals.

“We are absolutely looking to see how we can grow at an accelerated pace through acquisitions,” said Haas.