Coinbase, one of the largest cryptocurrency exchanges in the world, is reportedly in talks with some of the biggest banks in Canada to promote the adoption of digital assets in the country. According to a recent article by Bloomberg, Coinbase has approached several Canadian lenders, including Royal Bank of Canada and Toronto-Dominion Bank, to explore the possibility of offering crypto-related services to their customers.
Coinbase’s move comes as Canada has emerged as a leader in the global crypto space, with several regulatory approvals and innovations in the sector. For instance, Canada was the first country to launch Bitcoin exchange-traded funds (ETFs), which allow investors to access the cryptocurrency market without holding the underlying asset. Canada also has a thriving crypto mining industry, thanks to its abundant and cheap hydroelectric power.
Coinbase’s chief executive officer, Brian Armstrong, said in a recent interview that he believes Canada is “very forward-thinking” on crypto and that he hopes to partner with local banks to educate and empower Canadians to use digital currencies. He added that Coinbase’s mission is to create an open financial system for the world and that working with traditional financial institutions is a key part of achieving that goal.
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Coinbase already has a presence in Canada, having launched its platform in the country in 2015. However, the company faced some challenges in 2018, when one of its payment processors, Vogogo, shut down its operations, leaving Coinbase without a reliable banking partner. Since then, Coinbase has been working to restore its services and expand its offerings in Canada.
One of the potential benefits of collaborating with Canadian banks is that Coinbase could gain access to the country’s fast and efficient payment system, known as Interac. Interac allows users to send and receive money instantly through their bank accounts or mobile devices, making it an ideal option for crypto transactions. Coinbase could also leverage the banks’ existing customer base and reputation to attract more users and increase its market share in Canada.
Coinbase is not the only crypto company that is eyeing the Canadian market. Earlier this year, Gemini, another major US-based exchange, announced that it had obtained a license from the Investment Industry Regulatory Organization of Canada (IIROC), which allows it to operate as a regulated dealer in the country. Gemini also partnered with a local fintech firm, Wealthsimple, to offer crypto trading services to Canadians. The growing interest and activity in the Canadian crypto space reflects the increasing demand and adoption of digital assets around the world. As more people and institutions embrace crypto as a new form of money and investment, Coinbase and other players are looking for ways to expand their presence and offerings in this emerging market.
The article cites unnamed sources who claim that Coinbase has approached several banks, including Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, and Canadian Imperial Bank of Commerce. The sources also say that Coinbase is looking for regulatory approval from the Office of the Superintendent of Financial Institutions (OSFI), the federal agency that oversees the banking sector.
Coinbase’s move to collaborate with Canadian banks is seen as a strategic step to expand its presence in the country, where it already has more than 3 million users. The company also recently launched a dedicated website for Canadian customers, offering them access to more than 50 cryptocurrencies and various educational resources.
By partnering with banks, Coinbase hopes to increase the awareness and adoption of cryptocurrencies among Canadians, who are already among the most active users of digital assets in the world. According to a 2020 report by the Bank of Canada, about 5% of Canadians owned some form of cryptocurrency, up from 3% in 2018.
Coinbase also aims to benefit from the growing demand for crypto-related services from institutional investors, such as hedge funds, pension funds, and corporations. The company has been offering its Coinbase Custody service to institutional clients since 2018, providing them with secure and compliant storage solutions for their crypto assets.
Coinbase’s potential partnerships with Canadian banks could also pave the way for more innovation and competition in the crypto space, as other players may follow suit and seek similar collaborations. For instance, Wealthsimple, a Canadian online investment platform, launched its own crypto trading app in September 2020, allowing users to buy and sell Bitcoin and Ethereum.
Coinbase’s initiative to work with Canadian banks is part of its broader vision to create an open financial system for the world, where anyone can access and participate in the global economy using cryptocurrencies. The company believes that cryptocurrencies can enable more economic freedom, inclusion, and opportunity for people around the world.