Following the strategic investment of Westpac Banking Corporation’s venture capital firm Reinventure earlier this year, Coinbase co-founder Fred Ehrsam announced that the company has set its plans to a potential expansion to Australia, and is currently trying to educate the local regulators on the benefits of bitcoin.
Coinbase’s Series C funding round, participated in by Westpac, raised $75 million USD in January 2015, from large financial organizations and venture capital firms including Spanish bank BBVA and Fortune 500 financial services group USAA. This deal marked the first investment of an Australian bank to a Bitcoin company.
“We’re very excited to be working with such a great management team and look forward to helping them grow their business,” Simon Cant, co-founder of Reinventure, told The Sydney Morning Herald.
Although the funding round was completed in January 2015, the involvement of Westpac Banking Corp. in Coinbase’s Series C funding round was disclosed only on June 29.
As the blog post read, “One of Reinventure’s primary objectives is to create opportunities between its portfolio companies and Westpac, Reinventure’s largest investor and one of the top 15 largest banks in the world. We plan to work closely with Reinventure and share insights into the use of digital currencies globally.”
Ehrsam, former Goldman Sachs trader and Coinbase co-founder explained that the strategic investment of Westpac will allow Coinbase to educate financial regulators in Australia about bitcoin, which will hopefully ease the expansion of Coinbase throughout Australia. Ehrsam emphasized the benefits of bitcoin, and its cost efficiency and transparency that enables anyone to transfer money internationally, without the involvement of third-party institutions.
“We plan to work closely with Reinventure and share insights into the use of digital currencies globally,” the San Francisco-based Coinbase said in an announcement on its blog on Tuesday morning. A spokesman for Westpac confirmed the investment.
Coinbase’s “mission is to be the most trusted bitcoin company in the world and it is investing heavily in next generation security. Reinventure’s investment will provide key insights into the use of digital currencies and associated technologies,” a Westpac spokesman announced.
With the support of Reinventure and its connections with the local regulators of Australia, Coinbase will aggressively pursue its plans to expand to the Asia Pacific region, and to establish trust and relationships with regulators.
“In the U.S., we are known as the pre-eminent bitcoin company because we have trust of consumer in terms of security and relationships with regulators,” Ehrsam said. “As we open to new markets, we want to establish that trust as well.”
Coinbase will first work closely with Westpac and educate the bank about the benefits and possible applications of bitcoin that could be implemented to optimize banking operations.
Coinbase co-founder Ehrsam has gone through several discussions with Westpac CEO Brian Hartzer, and stated that Hartzer feels the need to understand the blockchain and distributed ledger technology used by bitcoin, and the bank is wanting to “get smarter” now.
Joseph is a web developer and designer, writer and a passionate musician who loves to travel. He has worked as a researcher for a number of venture capital firms and as a freelancer designer for resorts and corporations in Korea and the Philippines.