Trillion US Dollar Market: Coinbase Opens New Crypto Platform With ‘Project Diamond’

Coinbase Asset Management introduces Project Diamond, an innovative platform based on smart contracts that enables institutions to seamlessly trade native digital assets.

• Project Diamond enables tokenization of real-world assets on the blockchain
• The first digital debt instrument has already been issued, distributed and tested
• Tokenized assets could become a multi-trillion market

Project Diamond

With Project Diamond, Coinbase Asset Management is launching a smart contract platform that enables institutions to seamlessly create, buy and sell native digital assets such as Coinbase explained in the relevant press release.

The platform uses the Coinbase technology stack and base Ethereum Blockchain at Layer 2 will “enable safe and compliant capital market activities that will further support institutional adoption of the global crypto-economy,” the group said in a statement.

Coinbase aims to bridge the gap by supporting institutional use of the next generation of financial technology. Currently, less than 0.25 percent of global assets are represented on blockchain infrastructure, meaning that significant efficiency gains remain untapped.

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“We’re starting to tokenize real-world assets on the blockchain in a regulated way,” explains Coinbase CEO Brian Armstrong via X.

We are starting to tokenize real world assets in a regulated on-chain way. https://t.co/2vT0zCV0Vx

-Brian Armstrong??? (@brian_armstrong) December 13, 2023

The project is currently aimed exclusively at institutional users outside the US. The Abu Dhabi Global Market (ADGM) Financial Services Regulated Activity (FSRA) has granted preliminary approval to Project Diamond to conduct regulated financial technology services development activities at the RegLab.

The first debt instrument

As a test, the first digital debt instrument was successfully issued, distributed and payable on the platform on November 10. The goal was to demonstrate the technical feasibility of FSRA as it prepares to connect to the ADGM RegLab sandbox.

While this on-chain financial activity reflects the large-scale flow of debt securities that powers businesses in the traditional financial sector around the world, settlement of the USDC-based digital discount voucher takes place within a single use case with near-instantaneous settlement speed on the Core platform, Coinbase continued in explaining.

This transaction represents a significant improvement in operational efficiency and simplifies a significant financial process, further facilitating institutional participation 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 digital native assets directly on-chain. Along the way, we are looking for world-class partners to join us in the future of global Together we will scale finance as software ,” the press release states.

Tokenized assets: a multi-trillion market

The fusion of cryptocurrencies and traditional asset classes, including fiat currencies, stocks, treasuries and real estate, is currently experiencing unprecedented growth, as asset manager 21.co explains.

Blockchains will therefore become the underlying infrastructure for every asset class and create use cases beyond our imagination, the asset manager thesis. The tokenized asset market is forecast to grow into a multi-trillion dollar market in the next few years. 21.co estimates that by 2030, the market value of tokenized assets will be between $3.5 trillion in a bearish scenario and $10 trillion in a bullish scenario.

Market value is derived from the estimated penetration rate of the entire addressable market across various asset classes, including non-financial corporate debt, real estate funds, private equity, securitization, trade finance and public debt.

Finanzen.net editorial team

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