Coinbase set the cryptocurrency world buzzing this week when it announced its intention to support for ERC20 tokens, which is the standard for smart contracts as well as tokens sold in initial coin offerings.
The move comes well after the ICO wave has crested and regulatory structures have begun, however lightly at this stage, to drop down onto the previously wild space. The timing is no accident.
From the Coinbase blog:
We’re excited to announce our intention to support the Ethereum ERC20 technical standard for Coinbase in the coming months. This paves the way for supporting ERC20 assets across Coinbase products in the future, though we aren’t announcing support for any specific assets or features at this time. We are announcing this both internally and to the public as consistent with our process for adding new assets.
ERC20 is a technical standard used for Ethereum smart contracts. ERC20 assets have become a popular way for teams to quickly build interoperable contracts/assets. More recently, our Ethereum wallet and Dapp browser Toshi added native support for ERC20.
Coinbase currently supports Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. Support for Ethereum did not extend to token built on the ERC20, which meant companies pursuing ICOs could not rely solely on Coinbase.
The company, the leading cryptocurrency wallet in the U.S., has faced increased challenges lately, including old rival Circle’s re-emergence in the crypto space. The timing of the move also follows the SEC’s signaling that all tokens are securities, which may indicate that altcoins will soon be regulated and therefore, less risky.
Coinbase indicated it will wait for “additional regulatory clarity” before supporting specific altcoins on GDAX, its digital asset exchange, and would supports coins on the Coinbase wallet itself only after approving them for GDAX.
On Twitter, ICOs and altcoins continue to be alternately objects of mockery or reverence, depending on one’s point of view:
What if ICOs are all just performance art trying to make a point about underfunded and ill-equipped securities regulators?
— Tracy Alloway (@tracyalloway) March 27, 2018