Brian Armstrong Mulls Over Coinbase Bank With Non-Fractional Reserve

1. Brian Armstrong and Coinbase executives are interested in creating a bank.
2. A Coinbase bank may feature outbound wires, multi-user support, and non-fractional reserve.
3. Kraken also revealed its plans to create a bank just recently.

Coinbase CEO Brian Armstrong has made it plain that he is mulling over the creation of a bank in light of the Silicon Valley Bank fiasco. According to his post, this is “definitely something that [they have] thought about.”

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Three features that came to Armstrong’s mind are outbound wires, multi-user support, and non-fractional reserve. For those who may not know these terms, an outbound wire refers to cross-border transfers as well as payments made in a currency aside from the US dollar.

Multi-user support is not clear, although one could suggest that it may refer to a bank that allows multiple people to co-own an account at an average Joe level. Currently, traditional banks allow very few people to own a bank account, and the most common form of this is the so-called joint account.

Lastly, a bank with a non-fractional reserve means that every customer deposit is readily available for withdrawal in case the customer feels the need to do so.

Recently, Kraken also announced that it is planning to launch its own bank. The US-regulated crypto exchange did not specify any details regarding its bank, nor discuss whether it is planning to collaborate with any company, including Coinbase.

However, given the exclusive communication happening among crypto exchange executives, which became public knowledge when Binance CEO Changpeng Zhao and ex-FTX CEO Sam Bankman-Fried revealed their closed-door discussions in November 2022, it would not be surprising for Kraken and Coinbase to emerge as partners in the future.

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