Coinbase uses Base to build digital asset platform for TradFi institutions

Project Diamond is built on Coinbase’s Base and is managed by Coinbase Asset Management

December 12, 2023 12:25 pm

Coinbase CEO Brian Armstrong | TechCrunch/"518392245AG024_TechCrunch_D" (CC license)

Coinbase and its asset management arm teamed up to launch Project Diamond, a smart contract platform that allows institutions to trade and create new digital assets.

The goal is to allow institutions to manage digital assets “directly on-chain,” Coinbase said. However, only institutions outside of the US will be able to use it.

The platform uses both Base — Coinbase’s layer-2 blockchain — and Coinbase’s technology stack, which includes Coinbase Prime, Web3 Wallet and USDC. The platform itself is managed by Coinbase Asset Management.

Coinbase officially launched Base in August after unveiling the network back in February. Developers, however, were able to access Base back in July. The network quickly saw success.

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Back in November, the “first digital debt instrument on Project Diamond was successfully issued, distributed and matured on the platform” in a demonstration to Abu Dhabi Global Market’s Financial Services Regulatory Authority that it could join the RegLab sandbox.

The “digital discount note, denominated in USDC, was transacted within a single application at near-instant settlement speed on Base.”

Project Diamond received “in-principle approval” from the FSRA of ADGM, meaning it will be able to test out Developing Financial Technology Services within the sandbox.

Coinbase joins the ranks of banks and other institutions looking to tokenize real-world assets. Earlier this month, Societe Generale — France’s third-largest bank — issued a green euro-denominated bond on Ethereum.

The transaction amounted to 10 million euros — $10.8 million — and has a three year maturity.

Its tokenized bonds, SocGen said, will ensure “increased transparency and traceability as well as improved fluidity and speed in transactions and settlements.”

Its crypto unit also issued a euro-denominated stablecoin, dubbed EUR CoinVertible, on Bitstamp.

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