Institutional

Coinbase expands OTC and institutional trading services into Asia and Europe

  • Coinbase announced plan to push international expansion of OTC desk and other professional trading services
  • As such, it will support fiat deposits from non U.S. bank accounts from many regions for the first time 

Coinbase, the U.S. cryptocurrency exchange, announced Tuesday a plan to push the international expansion of its over-the-counter trading unit. 

The San Francisco-based firm rolled out the desk, which brings together buyers and sellers off of its main exchange venue, in November. Now, the platform will be available to certain customers in Asia, the UK, and Europe, according to a press release. 

So-called OTC desks oversee much of the volumes in cryptocurrency markets, as noted by research from consultancy Tabb Group, which estimates that trading activity in the OTC market is as much as three times larger than trading activity on exchange venues. Coinbase acts as an agency broker, bringing together the two sides of a trade.

Coinbase Prime, the prime broker business aimed at on-boarding large institutional clients, and its custody business, Coinbase Custody, will also be available in the aforementioned regions. As such, Coinbase will now support for the first time Swift transfers from non U.S. bank accounts in many countries it did not support fiat deposits. To be clear, the firm had already been offering retail services to a number of European countries, including Italy, the UK, and Sweden.

Dan Romero, the head of Coinbase’s institutional business, noted in an interview with The Block that the firm had ambitions to expand internationally as part of a broader strategy shift. Originally, the plan for its institutional business was to go after Wall Street-level clientele, such as large asset managers and hedge funds in the U.S. As part of those efforts, the firm was set to bring on Jonathan Kellner, former CEO of Instinet, to build out Coinbase’s institutional services. But now the firm is looking to grow its business strictly by attracting crypto-native funds and expanding internationally, according to Romero.

“You need deep liquidity, easy access in and out, and I think again that doesn’t change too much for crypto funds,” Romero said in an interview with The Block earlier this month. “There is a lot of trading volume happening outside of the U.S. so we want to expand our services to the international market and take marketshare in the EU and Asia quite a bit.”

The firm said it sees “a bright future ahead for crypto in Asia.”

Leading Coinbase’s outreach in the region is Nao Kitazawa, CEO of Coinbase Japan, and Kayvon Pirestani, who is leading institutional sales. Previously, Pirestani led institutional sales in the U.S. alongside Christine Sandler, a former NYSE executive. 

In Asia, Coinbase faces competition from competitor exchanges including two of the largest — Huobi Global and Binance. Binance, the largest cryptocurrency exchange, saw $1.2 billion of crypto trading on its venue over the last seven days compared to Coinbase’s $134 million.