Coinbase to move customer and corporate USDC balances to Base

Coinbases move on-chain will carve a path toward a future on-chain financial system, claimed Bankless podcast co-host David Hoffman.

Coinbase will start moving more of its customer and corporate USD Coin (USDC) stablecoin accounts to Base — its Ethereum layer-2 blockchain launched a little over seven months ago.

Coinbase vice president Max Branzburg posted to X on March 26 claiming the move would allow the crypto exchange to “manage and secure customer funds with lower fees and faster settlement times.”

The change only impacts Coinbase.com accounts — not Coinbase Wallet, as those users are responsible for their own private keys.

Currently, Coinbase.com user tokens are custodied by Coinbase in a wallet secured by multiparty computation.

Source: Max Branzburg

Branzburg stressed that Coinbase always holds customer assets 1:1 and doesnt lend funds out unless instructed.

Coinbases move on-chain will carve a path toward a future on-chain financial system, explained David Hoffman, a co-host on the Ethereum-focused show Bankless in a March 26 X post.

Bankless co-host, Ryan Sean Adams, believed the move would also set a precedent for cryptocurrency exchanges and banks to follow suit.

Every asset is a future token [...] Every bank is a future chain, Sean Adams added.

Not everyone is on board with the move, though.

X user “callmeKappa.algo” suggested Base is too centralized in its current state.

Related: Base TVL doubles in a month as pundits tip memecoins to drive adoption

Coinbase is currently the sole sequencer of Base, according to L2BEAT data — meaning the chain is fully controlled by the exchange.

However, the firm has iterated its intention to progressively decentralize Base over time.

Base was launched as an Ethereum scaling solution on Aug. 9, 2023. It uses optimistic rollups to store transaction data off-chain and submit transactions to Ethereums base layer.

Coinbase also open-sourced Base's code in October to increase transparency and accountability while simultaneously allowing public contributions to the project.

It is currently the fourth largest Ethereum layer 2 by total value locked at $2.63 billion, trailing only Arbitrum, Optimism and Blast, according to L2BEAT.

Base notched an all-time high of 2 million daily transactions on March 16 as figures for daily new users also continue to rise.