BlackRock, an American multinational investment management corporation has partnered with exchange giant Coinbase to offer its institutional clients access to crypto. The deal was announced by Coinbase today.
Through connecting Coinbase Prime and Aladdin, institutional clients of both firms can now have direct access to crypto assets. Clients can now access crypto trading, custody, prime brokerage, and reporting capabilities.
Coinbase Prime is Coinbase’ dedicated trading platform for institutional clients while Aladdin is Blackrock’s investment management platform.
Blackrock’s partnership with Coinbase is a show of confidence in the exchange considering its recent crisis. Recently, former Coinbase global products manager Ishan Wahi, alongside two others were indicted for insider trading by US authorities. There are also allegations that the exchange has been running unregistered securities.
The American crypto exchange also announced the retrenchment of about 18% of its staff in anticipation of prolonged crypto winter.
Blackrock seems not to be bothered about these issues, according to the announcement both firms will work together to progress the platform integration. It will roll out functionality in stages to its clients
According to Joseph Chalom, Head of Partnerships at Black Rock, its institutional clients are eager to gain exposure to the digital-asset markets. “The clients are focused on how to efficiently manage the operational life cycle of these assets,” he said.
The partnership deal also signals the continued confidence of traditional financial institutions in the prospect of cryptocurrency.
For Coinbase, the agreement offers some positive news. Its stock rose as high as 40% on account of the news.
Earlier in the year, the asset manager revealed its plans to wade into the digital currency ecosystem.
Proponents of digital currencies have emphasized the benefits inherent in crypto adoption. Some of these benefits accounted for BlackRock’s decision to dive into the space. It also had a working group whose sole task was analyzing crypto.
Also, in April, the asset manager joined Circle, the distributor of the USD Coin (USDC) as a strategic partner. It participated in a $400 million funding round for the crypto payment technology firm. The service will be restricted to Bitcoin (BTC) for now.