Bitpanda has unveiled a strategic partnership with Coinbase, to make the exchange one of the approved liquidity providers of its white label investment product. Let’s take a closer look at what this deal means, which will mutually benefit both companies.
Coinbase cash to become part of Bitpanda Technology Solutions
On Thursday, Coinbase and Bitpanda formalised a partnership, with the US platform providing liquidity to the Austrian exchange’s Technology Solutions product:
We’re excited to announce that Bitpanda Technology Solutions is collaborating with another industry leader. With Bitpanda Tech, @coinbase will offer a regulated trading infrastructure to their clients like banks and financial institutions outside of the US. pic.twitter.com/leyHChQ3IU
– Bitpanda (@Bitpanda_global) May 25, 2023
As described by Bitpanda, this agreement will be mutually beneficial to both parties:
“As part of the agreement, Bitpanda will add Coinbase Exchange to its network of approved liquidity providers, giving institutions the opportunity to leverage Bitpanda’s extensive set of regulatory licenses and KYC-as-a-service to accelerate their time to market across Europe. “
Bitpanda Technology Solutions is an Investment-as-a-Service (IaaS) platform, which means that it offers white-label investment solutions to clients of other institutions. In particular, it works with Lydia and N26 on their cryptocurrency services.
A way to increase Coinbase’s presence in Europe
In recent months, Coinbase has been playing both sides of the coin. On the one hand, the company is fighting to try and convince US regulators to establish a clear regulatory framework, which is no easy task, and on the other, it is diversifying its activities globally so that it is no longer so dependent on the United States.
While Bitpanda already has a solid regulatory footing in Europe, for example through its registration as a digital asset service provider (DASP) in France, Coinbase will be able to reap the benefits.
Indeed, thanks to this agreement, the exchange will be able to redirect its institutional customers to Bitpanda Technology Solutions, for whom it provides liquidity, thus creating synergies between the two companies.
This collaboration is interesting because, with more liquidity at its disposal, Bitpanda could be able to reach larger players, such as commercial banks wishing to offer cryptocurrency-related services, thereby accelerating mainstream adoption.
However, it should be qualified by adding that the multiplication of trusted third parties for the same service increases the risk of contagion in the event of a problem. We have seen this time and again, notably with Gemini’s Earn product, which was affected by the bankruptcy of Genesis, itself affected by FTX.
