Coinbase Trying to Become a Bank? Good or Bad for Bitcoin?

[Potato Chips]

It's the same thing Xapo bank is doing, a UK based digital bank that they claim to be lending Bitcoin and doing savings with Bitcoin for some period of time getting rewards based on percentage ROI.

It seems not protected to me because it doesn't operate on a decentralized manner, it's not safe keeping funds on a centralized institutions for so long expecting a return that will ruin my investment journey with time.

I'll rather go for decentralized savings and lending, will be saved a little bit.

Xapo can be a good example on how bad it's gonna be hahah

Though, these "decentralized" protocols or whatnot actually can still be exploited, thus bring another risk to your holdings. Best to prioritize safety and hodl the bitcoins in a non-custodial wallet—that ain't a hot wallet. In addition, I believe bitcoin will still moon over time, so I don't try to chase these yields offer by other platforms as such is enough for me + you get to sleep better at night lol.

[aoluain]

Coinbase is custodial service so honestly them becoming some sort of bank doesn't really matter at this point.
Coinbase is an active service since early days of bitcoin exchanges. It's a legalized

This is a good point. Coinbase is a decentralized service always looking for gains whatever the conditions as much as it is legal.
Coinbase is already a bank since many years since it always comply with banks policies and its activities don't accross the limits of traditional banks.

Coinbase is the first centralized exchange i knew and it is one of the few old exchangers that exists since early bitcoin age. I don't use Coinbase but i believe in its role during long years to help spreading bitcoin knowledge despite of strict regulations.

and anyone not using self custody will be totally fine with Coinbase as a bank,
its normal for these people to use a centralised exchange.


Didnt Michael Saylor comment on this a while back, about not selling your
Bitcoin - instead borrow against it. Coinbase obviously has done their research
and has determined that their is a market for a Bitcoin/crypto based bank.

If there can be Spot ETF's around Bitcoin - why not a bank?

[CryptoYar]

[...]

You are very right that Coinbase is not Bitcoin and this is one of main differences Bitcoin is spread out technology that is run by code and users all over world, meaning its key rules such as scarcity cannot be changed by one group of people. Coinbase, on other hand, is single spot, private company that is service that is built on Bitcoin, so it must follow government rules, make business decisions, and is able to change its policies whenever it wants. Therefore, any action Coinbase or any other large exchange takes, such as changing fees or things it adds, does not affect way  Bitcoin network itself works or its ideas, and each user is free to decide whether to use spread out Bitcoin as it is more easy, as compare to single spot services such as Coinbase.

[BALIK]

If there can be Spot ETF's around Bitcoin - why not a bank?

Yes, since the bitcoin ETF was approved, there has been a huge amount of money pouring into the market every day and as of now. The total amount of Bitcoin ETFs holdings is about 1.4 million BTC, representing about 6.7% of the total supply. Not to mention the amount of bitcoin on CEX is up to more than 2.1 million BTC as well as in the treasuries of organizations is also very large. But most of us don't care about that, so why are we worried about bitcoin bank?

If we were really worried about bitcoin's decentralization being undermined, we would be complaining and collectively opposing bitcoin ETFs, not cheering them on. Because they are essentially centralized organizations and operate no differently than banks.

[KiaKia]

Good for Bitcoin and crypto exposure but not great for crypto investors amd long term holders, because Coinbase is centralised and they are to be in control of your asset every time.

Since they will be managing the security of your coins you are at the mercy of control too, not your keys obviously, everything now belongs to Coinbase, I know many people will use their services but the few that understand users control won't allow it.

Xapo show me nothing but hell, especially after Bitcoin was at 70k, I had some amount left in Xapo from 2017 and it is now Worthing something, to move my coins out from Xapo wallet become almost impossible, the same shit you have to deal with when using banks.