Coinbase is an exchange for Bitcoin, Ethereum, Ethereum 2, Tether, and other cryptocurrencies. In February of this year, it established an unprecedented alliance with various stores in Mexico, such as Oxxo, Elektra, BanCoppel, and Bodega Aurrera, among others, to receive remittances through cryptos.
Coinbase and its QR in the Super Bowl
Do you know what the most effective and profitable Super Bowl ad during its 2022 edition was? He was famous for charging almost seven million dollars per minute in his commercial breaks.
The video consisted of a QR code bouncing around the screen that emulated DVDs era. It was a code to promote the fintech Coinbase, specializing in buying and selling cryptocurrencies. The platform collapsed minutes later due to high user demand: 20 million people just during the commercial’s last minute.
What is Coinbase, and who is the mastermind behind it?
In 2012, Brian Armstrong and Fred Ehrsam founded Coinbase in San Francisco. It is the largest cryptocurrency exchange in the United States regarding the number of transactions. It has Bitcoin, Dogecoin, Ethereum, BNB, XRP, USD Coin, and many more among its buying and selling options.
To date, it operates in more than 100 countries, including Mexico. All this without having physical offices since the business operates entirely through remote work.
Brian Armstrong, the mastermind behind Coinbase, has talked about how he came up with the project working with cryptocurrencies since he first met them in 2010. In the months since he created the first wallet prototype, He submitted it to startup accelerator Y Combinator in 2012, where he received support for his initial investment.
Currently, Armstrong is emerging as one of the most striking figures in the world of technology, although he remains far from the public eye.
To the delight of its investors, in April 2021, Coinbase went public on the New York Stock Exchange; it was valued at $86 billion at the close of its debut. Among its investors is BBVA, which is a shareholder of this fintech through its investment fund Propel.
Differences between Coinbase & Coinbase Pro
Coinbase’s base platform is for the general user new to cryptocurrency transactions. However, Coinbase Pro offers a more complex and informative experience than the central platform, designed for users more knowledgeable about economics and finance.
Both platforms have the same high standard of user security. but Coinbase Pro has one additional feature that adds extra security. And also, it has a more significant offer of cryptocurrencies, graphs, and a more complex visualization of financial operations possible.
Coinbase has a functional version in Spanish, while Coinbase Pro currently only operates in English. Also, both options are free from registration.
Coinbase and Remittances in Mexico
On February 15, 2022, Coinbase announced that it would launch a service in Mexico and more than 37,000 establishments such as Oxxo, BanCoppel, Soriana, Bodega Aurrera, and Elektra, among many others. It would allow Coinbase customers to buy cryptocurrencies in more than 20,000 Oxxo stores in the country.
The Mexican self-service chain branches would function as exchange centers for cryptocurrencies to cash (Mexican pesos, in this case). The American exchange offers an instant cryptocurrency delivery option as an essential service on its platform. With this, Coinbase bets on the market of cryptocurrency remittances from the United States to Mexico. The exchange operation for cash is carried out in Oxxo through a redemption code provided by the Coinbase app.
To encourage the use of Coinbase as a means of sending remittances, the company announced that until March 31, 2022, they would charge no fees for the conversion and collection in Mexican currency. Subsequently, they will work under a nominal fee between 25% and 50% cheaper than sending remittances through traditional means.
Currently, there are plans to expand this service to other stores and banking institutions.
Impact of Remittances in México
Every year the remittances sent by Mexican migrants to their country of origin represent an essential source of income for our country. According to the World Bank, in 2021, revenue from remittances exceeded 51 billion dollars, which implied an annual growth of 37.7%.
Mexico was among the top ten receiving countries for these international funds transfers. Remittances positively impact the Mexican economy since the money sent by migrants is reinvested in the local economy; people in Mexico use it to buy goods and services and save and make investments. It creates jobs and drives economic growth. In addition, they help reduce poverty and improve the living conditions of Mexican families.
Mexico in the Crosshairs of Coinbase
Mexico is one of the leading markets for cryptocurrencies regarding transaction volume and number of users. For this reason, Coinbase has partnered with Mexican banks and companies to facilitate access to cryptocurrencies and blockchain in Mexico.
It has also invested in Mexican blockchain startups such as Bitso, the leading exchange in Mexico that allows buying, selling, and storing cryptocurrencies. Likewise, it offers users access to the blockchain to carry out fast and secure transactions.
Coinbase Resists the Fall of Cryptocurrencies
The May slope was complicated for all sectors of the economy and notably for the crypto market. Virtually all cryptocurrencies were down, but stablecoins, in particular, suffered dramatic declines. The most notorious case is the Terra protocol with its UST and LUNA cryptocurrencies.
However, other cases, such as the stablecoin GYEN pegged to the Japanese yen, failed after eight months of operation. On May 13, several Coinbase users sued the exchange and GMO-Z.com, GYEN’s issuing platform, for hiding information and freezing trade in this crypto after its value fell by 80%.
On the other hand, the declaration of Coinbase’s bankruptcy risk scenario in the exchange’s quarterly report recently generated a lot of noise. Under this scenario, customers could lose their cryptocurrencies in the event of bankruptcy.
Brian Armstrong, CEO of Coinbase, clarified that his company is not at risk of bankruptcy in a Twitter thread. According to Armstrong, the declaration of such a scenario was an express request of the United States Securities and Exchange Commission. Still, it did not respond to the current status of the exchange.
Cryptocurrencies Facilitate Transactions and much more
The application of cryptocurrencies in remittances is very significant, as it saves large amounts of money and has a positive impact by facilitating this type of transaction. / However, the applications of cryptocurrencies and blockchain are much broader. The blockchain technology that allows information to be encrypted can be used to carry out secure voting from mobile devices, protect clinical files, and, of course, in financial services.
Updated and translated from Spanish on June 7, 2022.