Coinbase, the third-largest global cryptocurrency exchange in trade volumes, currently boasts an assets under management (AUM) figure of over $420 billion. This sum is representative of the digital asset value held by Coinbase for its users, a value which places Coinbase ahead of the 21st largest bank in the U.S., demonstrating the significant growth of the crypto industry.
This comparison was made by Brian Armstrong, the co-founder and CEO of Coinbase, who explained in a recent post that viewing Coinbase as a bank, it would, with its $0.42T in assets, be ranked 21st largest in the U.S. If it were treated like a brokerage, it would leap to 8th largest by AUM.
To offer a comparison, the New York Community Bancorp (NYCB), currently the 21st largest bank in the U.S., manages $112.9 billion in assets. This is less than a third of Coinbase’s AUM. NYCB reported a loss of $260 million for the fourth quarter of 2023, which followed their acquisition of the failed, crypto-inclined Signature Bank.
In contrast, Coinbase posted a net profit of $273 million in the same quarter. This was the first instance of positive income since the final quarter of 2021, as stated in the company’s letter to shareholders.
Looking to the future, Armstrong predicts a merging of numerous financial services into a unified, advanced crypto platform, or neo bank. In this future system, individuals would have a single predominant financial account encompassing all functions, enabled by increasingly efficient crypto technologies.
However, as noted by Chintan Turakhia, senior director of engineering at Coinbase, there still exist “friction points” that impede mainstream adoption of this vision. Wallet setup complexities, transaction fees and the need to purchase native tokens for network transactions are some of the areas that need addressing to attract more users to crypto.