BlackRock partners with Coinbase to provide institutions with cryptocurrency services

BlackRock ( BLK.US ) is partnering with Coinbase (COIN.US) to facilitate the management and trading of bitcoin for institutional investors, marking the world’s largest asset management firm’s move to cryptocurrencies An important step forward in the field. Advanced clients will be able to use BlackRock’s Aladdin investment management system to monitor their exposure to bitcoin and other portfolio assets such as stocks and bonds, BlackRock also provides for trades on Coinbase, a statement Thursday said. Facilitation of financing and transactions. BlackRock said the focus of the partnership with Coinbase, the largest U.S. crypto exchange, “will be on Bitcoin first.”

The move underscores the further expansion of Wall Street’s traditional financial institutions into cryptocurrencies and related technologies, even after a collapse in such assets this year. Bitcoin has already lost about half its value in 2022, and the collapse of the Terra ecosystem and Three Arrows has raised questions about the market’s resilience and prompted increased scrutiny from regulators.

Coinbase is facing SEC investigation: The SEC is investigating whether the company improperly allowed Americans to trade “digital assets” that should have been registered as “securities.” BlackRock chose to partner with Coinbase because of the latter’s market size and its role in providing trading, custody services, prime brokerage and reporting capabilities. The services will be available to customers of both companies.

“Our institutional clients are increasingly interested in entering the digital asset market and focusing on how to effectively manage the operational lifecycle of these assets,” Joseph Chalom, head of global strategic ecosystem partnerships at BlackRock, said in the statement.

Coinbase disclosed in May that institutional investors accounted for about three-quarters of the company’s $309 billion in trading volume in the first quarter. Coinbase’s clients include hedge funds, corporations and asset managers.

“Coinbase’s partnership with BlackRock and Aladdin is an exciting milestone for our company,” Brett Tejpaul, Coinbase’s head of institutional products, and Greg Tusar, vice president of institutional products, said in a separate statement. development, and the creation of new access points, as institutional encryption adoption continues to accelerate rapidly.”

For BlackRock, the partnership is the next step in its broader strategy to expand into digital assets. BlackRock CEO Larry Fink said in March that the company is looking at the growing importance of digital assets and stablecoins and how they can be used to help customers.

The U.S. stock market of Coinbase, a digital currency exchange, rose more than 40% in early trading, and its stock price was $101.23. The company formed a partnership with BlackRock Group.

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