Coinbase’s assets under management (AUM) have exceeded $420 billion, making the cryptocurrency exchange more valuable than the 21st largest bank in the United States. This highlights the ongoing growth of the crypto industry.
Coinbase, the third-largest centralized cryptocurrency exchange (CEX) in the world based on trading volume, currently holds over $420 billion worth of digital assets on behalf of its users. According to Brian Armstrong, the co-founder and CEO of Coinbase, this AUM would position Coinbase as the 21st largest bank in the US. In a February 7th post, Armstrong stated, “If you think of Coinbase like a bank, we now hold about $0.42T in assets for our customers, which would make us the 21st largest bank in the US by total assets, and growing.” Armstrong also added, “If you think of us more like a brokerage, we’d be the 8th largest brokerage today by AUM.”
Coinbase’s $420 billion AUM is more than three times the $112.9 billion worth of assets managed by the New York Community Bancorp (NYCB), which currently holds the 21st position among US banks. The NYCB recently reported a quarterly loss of $260 million for the fourth quarter of 2023 after acquiring the collapsed crypto-friendly Signature Bank in 2023.
In contrast, Coinbase achieved a net profit of $273 million for the same quarter, marking its first positive income quarter since the fourth quarter of 2021, as stated in the exchange’s shareholder letter.
Coinbase CEO, Armstrong, believes that cryptocurrency will bring together various financial services into a single primary financial account in the future. He wrote, “With crypto, the line between these categories is blurring. In the updated financial system, you will have a single primary financial account which serves all these functions. A greater percentage of global GDP will run on more efficient crypto rails over time. We’ll have sound money, lower friction transactions, and greater economic freedom for all.”
However, to encourage mainstream adoption, the crypto industry still needs to address the most significant friction points, according to Chintan Turakhia, Senior Director of Engineering at Coinbase. Speaking exclusively to Cointelegraph at EthCC, Turakhia emphasized, “If our goal is to bring in the next billion users—and let’s start with just 100 million—we have to remove all those friction points.” Some key friction points include setting up a wallet with a complex seed phase, paying transaction fees, and purchasing blockchain-native tokens for transactions on a network.