Coinbase Unveils Project Diamond for Institutional Asset Management

Coinbase and Coinbase Asset Management have introduced “Project Diamond,” a platform powered by smart contracts.

This new system aims to enable institutions by facilitating the seamless creation, administration, purchase, and sale of various digitally native assets directly on the blockchain.

According to the official announcement, Coinbase Asset Management has specified that the initial application of Project Diamond will be restricted to registered institutional users located outside the United States. This involves the utilization of Coinbase Prime custody, the Coinbase Web3 wallet, the USDC stablecoin, and the Ethereum Layer 2 blockchain Base, which was incubated by the exchange.

Project Diamond reportedly executed the successful issuance, distribution, and maturity of its inaugural digital debt instrument on the platform on November 10th. This technical demonstration aimed to showcase the platform’s feasibility to the Financial Services Regulatory Authority as part of its preparations to enter the ADGM RegLab sandbox.

While this on-chain financial activity resembles the substantial movement of debt instruments that fuel traditional global companies in finance, the digital discount note, denominated in USDC, was executed within a single application with nearly instant settlement speed on Base.

Coinbase said that this transaction signifies a significant improvement in operational efficiency, streamlining a crucial financial process and further opening the door for institutional involvement in the crypto economy.

“Coinbase Asset Management is building Project Diamond to enable a future where institutions can create, distribute, and manage a wide range of digitally-native assets directly on-chain. On our journey, we seek world-class partners to join us in imagining and creating the future of the global financial system. Together, we will make finance scale like software.”

The Motive

As per Coinbase’s estimates, less than 0.25% of total global assets are currently represented on blockchain infrastructure. This leaves massive efficiency gains uncaptured. The exchange intends to bridge this gap by allowing institutional use of next-generation financial technology.

As such, Project Diamond aims to serve as a platform to create, buy, and sell digitally native assets with the help of Coinbase technology stack and Base.

The latest development comes a week after Coinbase announced upgrading its wallet app to allow sending stablecoins using social media and messaging platforms.

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