Cryptocurrency exchange Coinbase has acquired the institutional business of cryptocurrency wallet and custody provider Xapo.
Coinbase said in a statement on Thursday that the deal will help expand its storage operations and increase assets under custody to be more than $ 7 billion.
According to a Fortune report on Thursday, Coinbase bought Xapo's institutional business for $ 55 million after beating another strong competitor, investment giant Fidelity.
Coinbase Custody's CEO Sam McIngvale indicated in the report that the exchange could look like crypto lending business in the future. “Basically, we need to help our investors earn returns on their assets. You can imagine borrowing bitcoin and earning interest on it, "McIngvale was quoted as saying.
Launched in 201[ads1]3, Xapo is known for its wallet services including physical vaults stationed in Switzerland, which are used to store customers' cryptocurrencies in a Fortune's report added that with this deal, most of Xapo's major customers have already decided to move their cryptocurrency to Coinbase, which will now store more than 514,000 bitcoin for Xapos worth $ 5.3 billion at today's price.
In May this year, CEO Brian Armstrong at CoinDesk & # 39; s Consensus 2019 event said Coinbase Custody had just crossed $ 1 billion in assets under management at the time of 70 institutions.
The report today said that if Coinbase will be able to board remaining customers of Xapo, the custody service will have more than 860,000 bitcoin in total un there custody, worth over $ 8 billion illion.
"When we chose Coinbase, we are confident that Institutional Custody Business is going to a company that can offer good insurance, loan and investment options," said Xapo's founder and CEO Wences Casares. "We believe that Coinbase will take the opportunity to prove to our customers that they deserve their business."
Brian Armstrong image via CoinDesk