Coinbase Shifts USDC Balances to Base

Coinbase is moving more of its customer and corporate USD Coin (USDC) stablecoin accounts to its Ethereum layer-2 blockchain, Base.

More of Coinbase’s customer and corporate USD Coin (USDC) stablecoin accounts will migrate to Base, its Ethereum layer-2 blockchain, which it released a little more than seven months ago.

Coinbase Moves USD accounts To Base

On March 26, the vice president of Coinbase, Max Branzburg, made a post on X in which he asserted that the move will enable the cryptocurrency exchange to “manage and secure customer funds with lower fees and faster settlement times.”

The change only affects Coinbase.com accounts, Coinbase Wallet accounts are unaffected because users of Coinbase Wallet are in charge of their private keys.

Currently, Coinbase.com stores the tokens of its users in a wallet under multiparty computation protection. Branzburg emphasized that Coinbase keeps customer assets at a one-to-one ratio and does not lend out funds unless authorized.

David Hoffman, co-host of the Ethereum-focused show Bankless, offered an explanation in a March 26 article on X. Hoffman noted that the move on-chain will pave the way for a future on-chain banking system.

The co-host of Bankless, Ryan Sean Adams, believed that the move would also establish a precedent for cryptocurrency exchanges and institutions to make similar moves.”Every asset is a future token,” the author writes.

Sean Adams continued by saying that every bank is a potential chain. However, not everyone is on board with the decision to press forward. Base is now excessively centralized, according to a user named “callmeKappa.algo.”

According to the data provided by L2BEAT, Coinbase is the only sequencer of Base at the moment, which indicates that the exchange has complete control over the whole chain.

On the other hand, the company has frequently reiterated its goal to decentralize Base over time. In 2023, Base emerged as a scaling solution for Ethereum.

Optimistic rollups enable the off-chain storage of transaction data, after which the base layer of Ethereum receives the transactions. Additionally, in October, The exchange made the code for Base open-source to improve transparency and accountability while allowing the general public to actively participate in the project.

With a total value locked at $2.63 billion, L2BEAT now ranks as the fourth largest Ethereum layer 2. It is behind only arbitrum, optimism, and blast regarding total value.

The number of daily transactions handled by Base reached an all-time high of 2 million on March 16, and the number of new customers added each day continues to climb.