Coinbase has announced its first expansion beyond the US market, launching bitcoin buying and selling services in 13 countries across Europe.
With the beta launch, Coinbase will now allow consumers in Austria, Belgium, Cyprus, Finland, France, Greece, Italy, Latvia, Malta, the Netherlands, Portugal, Slovakia and Spain to buy and sell up to €500 in bitcoin per day.
Speaking to CoinDesk, CEO and co-founder Brian Armstrong framed Coinbase's European market entrance as the natural next step for his business, which now boasts more than 1.6 million wallet users in the US as well as a host of billion-dollar US businesses that now use its merchant services, including Dell, Expedia and Overstock.
Armstrong told CoinDesk:
Though a big step for the Andreessen Horowitz-backed company, Armstrong also sought to frame Coinbase's expansion as a boon for the broader bitcoin industry, citing its expanded reach as an enabler of cross-border payment and new remittance products.
"These are the kinds of things that will start to unlock once we build this kind of infrastructure in each country," Armstrong added.
The news marks the second major announcement this week for the California-based bitcoin services provider. On 8th September, Coinbase revealed a new partnership with eBay-owned PayPal subsidiary Braintree that will expand bitcoin acceptance to more merchants, potentially including big brands such as LivingSocial, TaskRabbit and Uber as well as Armstrong's former employer Airbnb.
The next step in remittance
Throughout the interview, Armstrong sought to position Coinbase's expanded service as one that will help enable "bitcoin's killer use case", remittances.
Armstrong suggested he sees Coinbase as having no direct competitors in the European bitcoin market, in part, because of the larger vision the entire community is working toward and the combined effort it will take to achieve.
Citing the historical challenges faced by technology startups when attacking large financial incumbents such as American Express, MasterCard and Western Union, Armstrong said:
With the expansion, Armstrong also hopes to encourage other businesses to build on his work, even as he pledged to expand Coinbase into more European countries.
"I want there to be 100 entrepreneurs in each of these countries, someone there with local relationships who will get a bank deal done and launch some version of it that will help the whole ecosystem grow," Armstrong added.
Merchants services to follow
Coinbase's wallet service has long been available in Europe to bitcoin holders, but the announcement marks the company's formal entrance into the market by expanding its core offering – bitcoin brokerage services – into the region.
Though Armstrong stopped short of saying that Coinbase would begin seeking out merchant partners in Europe, he cited it as a service that could already be used for this purpose, saying:
Coinbase's largest rival in the US market, BitPay, is currently offering merchant services to the European market, and recently expanded into a new, 2,500 square-foot office.
The company aims to enroll as much as 40,000 European merchants by the year's end and is competing against smaller competitors including Bitmarket.lt and SpectroCoin.
Igniting the European market
Though BitPay has sought to paint the European market as being subject to different needs and forces than the US, Armstrong took a different approach, expressing optimism that Coinbase could replicate its success in the US abroad.
Armstrong framed his company's buying and selling services as the seeds that will allow Coinbase's services to blossom in the region, asserting his belief that this was the initial spark that lead to greater bitcoin awareness in the US.
Armstrong told CoinDesk:
Unsurprisingly, Armstrong cited awareness as his company's biggest obstacle, though he suggested that by entering the market and creating more excitement around bitcoin, Europe's market could follow a similar trajectory.
Planning the expansion
For the expansion, Armstrong said that Coinbase reached out to a number of countries in the region, writing letters and engaging local regulators in dialogue about its ability to extend its services to their jurisdictions.
Countries were then given the greenlight based on how favorably they responded to this outreach, and how specific their regulatory requirements were for bitcoin businesses.
Armstrong did not reveal Coinbase's banking partner, but did suggest that multiple partnerships could be supporting the expansion.
"You don't actually need one in each country, because we're using the SEPA network. But, you need at least one, and ideally more than one, so that's what we spent a bunch of time doing," he said.
Long road ahead
While the beta launch is an exciting step for the company, Armstrong framed the service introduction as just the first leg in much longer journey to to ensure that its brand takes root in the region.
Armstrong noted that Coinbase has begun the process of 'internationalizing' its website, but that this feature is not yet available. He said:
The CEO went on to suggest that Coinbase will continue its beta launch until it's ready to take on higher volumes. During this time, Armstrong said that Coinbase will work to ensure it can handle demand and that its risk management services are operating correctly.
As such, Armstrong's comments suggested that he hopes initial users can remain patient with the company until such time as the service can grow, saying:
Image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.