What is the Importance of Coinbase’s Support for Ethereum Testnets & ERC-20 Tokens?
Toshi, the Ethereum-based decentralized application browser and wallet operated by Coinbase, the world’s biggest cryptocurrency exchange brokerage, and wallet platform, is promoting Ethereum testnets and custom ERC-20 platforms.
Last week, following the addition of Ethereum Classic (ETC), the Coinbase team reported to its users and investors that the mid-term strategy of the company is to finally give its support to the entire ERC-20 token standard of Ethereum, such as initial coin offering (ICO) tokens and independent blockchain projects.
In the official statement released by Coinbase on June 12, it states:
“We have previously announced our intention to support the ERC20 technical standard and Bitcoin forks. We will announce the intention to add specific assets within those categories prior to final engineering integration. This is consistent with our public process for adding new assets.”
The general manager and vice president of Coinbase, Dan Romero, recognized that the company’s addition of Ethereum Classic may be seen as a surprising move to most traders. Romero stressed that at the present stage of cryptocurrency regulation, particularly in the US, it is important for the company to add digital assets that in no way can be termed as securities.
The US Securities and Exchange Commission (SEC) recently made an official clarification, that Bitcoin and Ethereum are not securities. Being a hard fork of Ethereum with a same decentralized and transparent characteristics as Ethereum, the clarification of the SEC immediately implies that ETC is also, in real sense, not a security.
William Hinman, the Director of Corporate Finance at the SEC, noted at the Yahoo Finance All Markets Summit:
“And putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions. And, as with Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value.”
The recent announcement of the SEC validated the mid-term vision of Coinbase to promote the ERC-20 token standard, which includes ICO tokens and Ethereum-based blockchain projects. The purchase of Paradex, a decentralized cryptocurrency exchange, and the new features added by Toshi, Coinbase’s native Ethereum app, has shown the confidence of Coinbase in listing tokens.
“We already automatically show you popular ERC20 tokens that you own inside your Toshi wallet. With this latest release, we now let you add custom ERC20 tokens that are not yet in our database,” the Toshi team said, making it possible for users and investors to store ERC-20 tokens freely, similar to other platforms such as MetaMask.
