Coinbase has unveiled a feature to Verified Pools, a KYC-verified liquidity pool designed to boost DeFi adoption while minimizing counterparty risks.
The initiative aims to provide both institutional and retail traders with compliant access to on-chain liquidity, fostering a more secure and transparent trading environment.CEO Brian Armstrong emphasized the importance of regulatory compliance, noting that certain digital assets require specific approvals under US law. He explained that Verified Pools will enable users to verify their identities and trade assets securely on-chain, setting a new benchmark for compliant DeFi participation.
We want to bring more assets onchain. Some of them, you can only trade with certain verifications under US law (maybe you need to be an accredited investor, or to be KYCed). With verified pools, you can get verified and trade these assets onchain.
Important building block to… https://t.co/vc7rU3L9nF
— Brian Armstrong (@brian_armstrong) March 19, 2025
To enhance user experience, Verified Pools allow users to connect their wallets—such as Coinbase Wallet, Prime Onchain Wallet, or third-party wallets—to a Coinbase Verifications credential. This credential acts as a trust badge, verifying users before they interact with liquidity pools. Built on Base, Coinbase’s layer-2 blockchain, the pools leverage Uniswap v4 to enhance smart contract functionality and improve performance. To maintain market health and optimize liquidity configurations, Coinbase has partnered with Gauntlet, a leading risk management platform.
Currently, Verified Pools are accessible to users in the United States, Singapore, the Netherlands, the British Virgin Islands, the Cayman Islands, and the Channel Islands. This strategic expansion aims to address growing institutional interest in the crypto sector.
The launch of Verified Pools coincides with a surge in institutional interest in digital assets. A recent report by Coinbase and EY-Parthenon revealed that institutional investors plan to increase their exposure to crypto in 2025. The survey, conducted in January, gathered insights from over 350 institutional investors, revealing that most already hold crypto and intend to allocate at least 5% of their portfolios to digital assets. Investors view crypto as a promising opportunity for risk-adjusted returns over the next three years. While Bitcoin remains the dominant asset, diversification into altcoins like Solana and XRP is also gaining traction.
The report also noted that institutional sentiment is driven by expectations of greater regulatory clarity, which could open new opportunities, particularly in crypto custody. However, the evolving regulatory landscape remains a significant challenge for the industry, as businesses navigate complex compliance requirements.
In line with these developments, Coinbase is strengthening its collaboration with government agencies amid the rapidly changing regulatory environment. According to a March 13 post on X by Armstrong, the recent launch of the U.S. Strategic Bitcoin Reserve has sparked increased institutional interest in crypto, signaling a potential shift toward mainstream adoption.
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