Crypto exchange Coinbase (NASDAQ:COIN) and asset management giant BlackRock (NYSE:BLK) agreed on a landmark deal to provide crypto services to institutional investors.
According to Coinbase’s blog post, the digital assets exchange and BlackRock are set to establish new access points to support crypto adoption among institutional investors.
Coinbase Prime And BlackRock’s Aladdin Join Forces
Under the terms of the deal, joint customers of Coinbase Prime and Aladdin—BlackRock’s investment management platform—will gain access to crypto trading, prime brokerage and reporting features. Joseph Chalom, BlackRock's global head of strategic ecosystem partnerships, said:
“Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets. This connectivity with Aladdin will allow clients to manage their bitcoin exposures directly in their existing portfolio management and trading workflows for a whole portfolio view of risk across asset classes.”
The deal will initially apply only to Bitcoin, said a BlackRock spokesperson. She added that the two companies will expand to other cryptocurrencies based on the client demand.
Coinbase Prime is a global prime broker platform for digital assets used by more than 13,000 institutional investors. The platform was designed specifically for institutions’ needs and allows trade execution services for 200 assets, custody services for more than 300 assets, prime financing, data and analytics, reporting, and more.
A Major Boost For Crypto In A Year To Forget
The deal was announced just months after BlackRock CEO LarryFink said Russia’s invasion of Ukraine could boost crypto adoption among central banks. He described this as a “less discussed” outcome of the ongoing war, which “will prompt countries to re-evaluate their currency dependencies,” he said.
“Even before the war, several governments were looking to play a more active role in digital currencies and define the regulatory frameworks under which they operate.”
he added.
The partnership comes amid a very challenging year for the crypto industry, with most of the cryptocurrencies standing down at multi-year lows due to record-high inflation and hawkish monetary policy by global central banks. Several major crypto firms have declared bankruptcy due to the market drawdown, including Celsius Network and Voyager Digital.
Coinbase itself also faced significant headwinds this year, including insider-trading allegations against its former employees. The crypto exchange made multiple changes to its token listing procedure earlier this year to address this problem.