Coinbase has announced that they will support for ERC-20 tokens “in the coming months” according to the company’s process for adding new assets. The process includes a number of factors:

  1. A committee will make an initial recommendation on which assets should be added to GDAX, partly based on a legal risk assessment conducted on the inclusion of the asset.
  2. If the asset passes risk review, then the executive team will review it for approval.
  3. If the asset passes the executive team’s review, then an announcement will be made on the blog and Twitter.
  4. The engineering team will begin integration of the coin into the platform, including public-facing APIs.
  5. An announcement will be made on the blog and Twitter when the final round of testing occurs.
  6. An announcement will be made on the blog and Twitter when integration is complete, and people will be able to make deposits.
  7. After evaluating liquidity and other factors, the coin may be added to the Coinbase platform.

This means two things. First, it means that the likelihood that Coinbase / GDAX will expand their offerings to include Ethereum-based tokens on their platform in the next several months is extremely high. Second, it means that any reports from existing cryptocurrencies and ERC-20 tokens suggesting that they will be adopted by Coinbase with immediacy are likely to be false or exaggerated.

Coinbase needs to expand their offerings if they are to remain competitive. Bittrex and other competitive exchanges are likely to add fiat support to their platforms, which will eliminate one of the few competitive advantages that Coinbase has.

The article describes support for these tokens “across Coinbase products,” suggesting that the support may not be limited to the exchange platform. That said, Coinbase has no plans to add ERC-20 support to Coinbase Commerce, their ecommerce app for Shopify and other transactional platforms and websites.

According to the announcement, the Coinbase Custody team is currently evaluating a number of ERC-20 tokens to add to the platform. This is the company’s institutional, B2B product, and it is expected to support more assets than those available for retail trade on GDAX and Coinbase.

The company is holding off on adding these tokens to GDAX. They will consider the addition of these coins only after there is further regulatory clarity on what is permissible according to US securities laws. As assets will not be added to Coinbase until after they are added to GDAX, the ultimate decision lies in the hands of the SEC, CFTC and other regulatory bodies. This also means that GDAX will likely support more types of cryptocurrencies than Coinbase at any given time.

Coinbase has acknowledged that there may be confidentiality and trading restrictions for the companies behind new coins added to the platform. We are not financial advisors and our opinions are just ideas. However, it seems logical that if Coinbase expands its coin offerings while the SEC is cracking down on exchanges that are not in compliance, then we may very well see a substantial amount of growth for Coinbase in coming months.