Coinbase shoots for crypto's 'AWS moment'

• Key insights: Coinbase has introduced a series of new products and collaborations with banks.
• What's at stake: Banks are warming to crypto and enabling technology following the passage of the GENIUS Act earlier this year. 
• Forward look: Coinbase is also developing a protocol for agentic commerce. 

While the GENIUS Act gave regulatory clarity to stablecoins, Coinbase is betting the law will push banks to adopt digital assets and related technology more broadly.   

"Post-GENIUS, bank board rooms are scrambling to get ready for what could be the biggest innovation for banks since electronic trading," Brett Tejpaul, co-CEO of Coinbase Institutional, told American Banker. Coinbase is ending the year by issuing a slew of new products and partnerships, including expanded collaborations with banks such as Standard Chartered, JPMorganChase and PNC to support digital asset development, and a deal with Swedish financial institution Klarna to raise funding in Coinbase's USDC stablecoin.   

"The idea of running finance on crypto rails as opposed to archaic tech is taking off," Tejpaul said. "They're looking at their currency operations, things like Treasury bills that occupy most of their balance sheets and asking 'what if we run this in crypto rails? What would that look like?'"

What is Coinbase doing?

Coinbase hopes banks will be attracted to its stablecoin rails and related digital asset services as a way to speed digital asset technology projects that improve transaction processing such as international B2B payments, treasury management and investments. For example, JPMorganChase recently made its JPM Coin deposit token, or JPMD, available for the bank's institutional clients on Base, a Coinbase-affiliated public blockchain. JPMD is not a stablecoin, and is in fact an alternative to stablecoins for banks that are worried about a potential stablecoin-driven drain on deposits and the dominance of fintechs among stablecoin issuers. 

"JPMorganChase for years had been on a private blockchain," Tejpaul said. "Its move to a public blockchain is a major step toward the tokenization of all asset classes."

Coinbase and Standard Chartered in late December expanded an existing partnership to include new crypto-related services for institutional clients, such as custody, staking, trade execution and security. In another move, Klarna said it would raise short-term funding denominated in Coinbase's USDC stablecoin. Klarna, which plans to issue its own stablecoin, said courting stablecoin investors would connect it to new sources of institutional investors and additional sources of funding. 

And in an earlier collaboration, Coinbase and PNC teamed to use Coinbase's "crypto as a service" platform to develop a service that enables the bank's clients to buy, sell and hold cryptocurrencies. Coinbase in recent days launched a menu of products designed to support digital assets or use enabling technology for other purposes. This includes extending stock trading to Coinbase users in the U.S., enabling users to invest in stocks using U.S. dollars or USDC, with stock trades existing alongside crypto portfolios. Other moves include making its business payments platform publicly available, and introducing Coinbase Advisor — an AI-powered tool that enables users to build portfolios on Coinbase with the guidance of AI agents. Coinbase is additionally building a protocol for agentic AI, joining other firms that are developing standards for agent-to-agent transactions, and on Monday said it would acquire The Clearing Company, enabling Coinbase to compete in "prediction markets," in which participants bet on events such as elections and sports. 

By expanding its products, Coinbase's strategy is to sell products to banks and fintechs that can ease the adoption of crypto-related services by offering a marketplace of services.

"We hope the banks are looking to not just solve today's problem but to build operations for digital assets. That's where 'crypto as a service' can be an enormous contributor to our overall business," Tejpaul said. "It's similar to AWS at Amazon." 

What the analysts think

Coinbase, which has its roots in cryptocurrency and stablecoins, is competing with payment technology firms such as PayPal and Stripe, which are also adding digital asset technology to their core payment services. In a research note, Deutsche Bank, which last week initiated coverage of Coinbase with a Buy rating, said, "The next phase of growth is on-chain. Deutsche sees Coinbase evolving beyond a traditional exchange into an 'everything exchange' that captures a broader share of on-chain activity across retail and institutional segments."

Deutsche also suggests Coinbase is protecting itself from the rapid valuation changes that often afflict cryptocurrencies. "While crypto volume and sentiment remain key drivers, Deutsche highlights Coinbase's growing mix of durable and recurring revenue, from USDC to institutional services, as a strategic hedge against macro volatility."

In another research note, KeyBank Capital Markets said Coinbase's product announcements are a "clear reflection" of efforts to broaden service while extending institutional leadership with new technology for developers. 

"As it relates to exchange updates, we like Coinbase's 'everything exchange' vision and are constructive on Coinbase enabling access to other asset classes," KeyBank analysts said.