Coinbase has been seeking to legitimise Bitcoin which has been plagued by volatile moves in its price, the high-profile theft of some Bitcoin from an exchange in Japan, and its use in the blackmarket economy. Coinbase has been working with regulators in the US and the UK to create legal frameworks under which it can operate.
The deal comes after Westpac, Australia and New Zealand Banking Group and Commonwealth Bank of Australia begin testing out payment technology from US-based company Ripple Labs, an exchange for messages that is being targeted towards banks. The Ripple network uses similar blockchain-style technology to Bitcoin, which it calls a ledger, but is a distributed network rather than a decentralised one.
Coinbase provides a range of services to the Bitcoin economy. These include allowing customers to exchange domestic currencies into Bitcoin and transfer payments in Bitcoin, storing Bitcoin in a digital wallet and providing merchant services to process transactions for companies dealing in Bitcoin. It also operates an exchange where speculators can bet on direction of price of Bitcoin, and various anti-money laundering and security services.
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