Coinbase Gears Up To Onboard Business Onchain With Plans To Store Users’ USDC On Base

The leading US crypto exchange Coinbase has revealed plans to move its business on-chain. One of the major changes involves storing customers’ USDC balances on its Ethereum layer-2 scaling blockchain, Base.

The recent report shows that the exchange will store both corporate and customers’ USDC balances on Base.

Coinbase To Transfer Customers’ USDC Balances To Base

A prominent crypto personality and X user, Ryan Sean Adams, posted the development on March 26. Adams outlined a potential trend that will follow as Coinbase moves its business on-chain.

According to Adams, Coinbase’s decision to move on-chain will trigger other similar actions from other exchanges. Over time, all exchanges will also migrate their business on-chain.

Further, the X user anticipates that banks will be the next to adopt blockchain technology. Also, it noted that every digital asset is a future token while every bank is a future chain. This will position Ethereum as the global settle layer in the future.

Max Branzburg, the VP of Product Management at Coinbase, gave the initial announcement regarding Coinbase’s plans to move businesses to Base. In his report, he offered insights into how Coinbase manages and secures users’ assets on the platform.

According to Coinbase VP, the exchange maintains a 1:1 ratio in the storage of customers’ funds relative to its reserves. Also, he assured users that Coinbase will never repurchase their funds.

Additionally, the VP stated that they won’t lend and execute any action on users’ funds without customers’ instructions.

Benefits Of On-Chain Migration

Coinbase will create some benefits for both users and the platform by migrating its businesses on-chain. 

The move increases users’ crypto management and enables automatic settlement in USDC. Also, it enhances the Coinbase customer experience with speedy execution of transactions.

Additionally, the migration reduces fees for users, allowing them to spend less than most prominent blockchains. Moreover, it encourages interoperability between Base and other blockchains like Ethereum, Polygon, and others. 

This means that users can easily receive or send funds from several blockchains without restrictions. The Coinbase layer-2 scaling network automatically swaps other assets for USDC to complete each transaction.

Meanwhile, many people within the crypto industry received the announcement of the on-chain movement with enthusiasm. 

They believe it’s a positive step in building a sustainable financial on-chain. Also, they hope that other exchanges and the broader banking sector will follow Coinbase’s move in the future. 

On the other hand, some criticized the Coinbase plan, highlighting the exchange’s centralized grip on Base.

However, Coinbase intends to gradually decentralize Base with time. It is working toward enhancing the blockchain’s transparency and turning its code to open-source to encourage public engagement.