Coinbase announced on Tuesday a new policy for adding assets, and it constitutes a major change for America’s biggest cryptocurrency brokerage.
The site will now allow the developer teams behind cryptocurrencies to fill out an application form for their token to be listed on Coinbase. Of course, Coinbase will also consider adding assets based on its own evaluation, as it has in the past.
And Coinbase will announce new assets differently. “Because listing announcements will become more frequent,” the company says, “we expect to publicly announce the addition of new assets only at or near the time of public launch.”
This is significant: Coinbase will no longer give an advance heads-up to say it will soon add a new token; instead it will make a single announcement at the time it adds a token or right before.
Coinbase currently offers trading of bitcoin (BTC), litecoin (LTC), ether (ETH), bitcoin cash (BCH), and ethereum classic (ETC).
The goal of the new policy, Coinbase says in a press release: “to rapidly list all assets that meet our quality criteria and are compliant with local law.” The policy comes with additional caveats and asterisks, some of which may raise eyebrows.
Since crypto regulation varies by country and state-by-state, Coinbase says it may begin offering certain tokens only outside the U.S., “in a jurisdiction-by-jurisdiction manner.”
And finally, applications for listing may eventually carry a fee, “to defray the legal and operational costs associated with evaluating and listing new assets,” Coinbase says. There will not be fees at launch of the new policy.
If and when Coinbase does implement application fees, that is likely to prompt criticism for taking money to list new coins. Critics may also see the new application option as a warning sign that Coinbase is about to get far less choosy, especially if it adds a raft of lesser-known “altcoins.”
All of this is happening nearly one year after Coinbase came under heavy fire when the price of bitcoin cash soared in the hours before Coinbase publicly announced it was adding the asset. Critics speculated that Coinbase insiders who knew the site would be adding bitcoin cash told their friends, who bought up the asset ahead of time.
In the aftermath of the scandal, Coinbase changed its policy to announce ahead of time when it is considering adding a new token, so as to avoid any whiff of impropriety. (It also said it implemented stricter employee trading restrictions.) In that spirit, Coinbase announced in March its intention to add ERC20 tokens — new assets created using the smart contract blockchain Ethereum.
As Coinbase CTO Balaji Srinivasan told Yahoo Finance in June, “Our new policy basically pre-announces assets to avoid exactly that kind of issue [that happened when it added bitcoin cash]. We announce the intent, then we go and list it. We’re really just trying to be extremely above-board with everything that we’re doing.”
Now the listing policy is already changing again. Why so soon?
“This is an evolution of the current process,” Srinivasan tells Yahoo Finance. “We looked at what was working and what wasn’t and found that having multiple announcements wasn’t in the best interests of our customers.”
In addition to adding more assets to Coinbase, and adding them more rapidly, Coinbase will “augment our quality control by adding star ratings, rankings, and reviews to help users learn about assets.” (Rival exchange Binance does this.)
Some may see the ratings and reviews as the biggest news here, from a consumer-facing standpoint. After all, Coinbase says its mission is, “to give anyone — no matter where they live — trustworthy and secure access to a more open, blockchain-based financial system.” In other words: get everyone into crypto.
Many Americans have stayed away from the crypto craze, turned off by negative headlines about crime or hacks or exchange outages. If Coinbase really builds out its library of reviews and ratings of cryptocurrencies as it adds more of them, the site could also become a Yelp-like platform for crypto education.
Daniel Roberts covers bitcoin and blockchain at Yahoo Finance. Follow him on Twitter at @readDanwrite.