TLDR
- Coinbase has launched a decentralized exchange feature for its Brazilian users, offering access to a broader range of tokens.
- The new feature allows Brazilian users to trade millions of on-chain pairs on DeFi platforms such as Uniswap and Aerodrome.
- Users will benefit from self-custody by default, maintaining control of their assets via an integrated self-custody wallet.
- Coinbase will absorb network fees, making decentralized trading more accessible for smaller transactions and first-time DeFi users.
- The launch aligns with Brazil’s new crypto regulations, which require foreign platforms to comply with local licensing and reporting standards.
Coinbase has launched a decentralized exchange (DEX) feature for its users in Brazil. This new option allows Brazilian customers to access a broader selection of tokens. It gives users a chance to trade tokens routed through DeFi platforms like Uniswap and Aerodrome. The move comes shortly after Brazil’s central bank introduced new regulations for crypto service providers.
The rollout shifts users from Coinbase’s centralized markets to decentralized ones. Brazilian users can now trade from a pool of millions of on-chain pairs. This expands their access from a few hundred tokens to a global selection of assets, without leaving the Coinbase app. Transactions are made through an integrated self-custody wallet, ensuring users maintain control of their assets.
Self-Custody and No Network Fees for Brazilian Users
With the new feature, Coinbase provides self-custody by default. Users manage trades using a self-custody wallet embedded in the Coinbase app. They retain control of their keys, bypassing centralized accounts for added security.
Another advantage is that Coinbase will cover the network fees for users. This removes one of the common barriers for smaller trades and DeFi newcomers. As a result, even users making small transactions will experience lower costs compared to traditional DeFi platforms.
Coinbase’s Approach to Regulation and Compliance
Coinbase is careful to comply with Brazil’s updated regulations. Brazil’s central bank recently introduced a framework requiring crypto service providers to meet new reporting and licensing standards. Coinbase must ensure it follows these rules while offering the new DEX feature.
The company’s model allows users to trade on decentralized exchanges like Uniswap or Aerodrome without directly interacting with those platforms. Coinbase handles all the routing and transaction construction behind the scenes. However, it has clarified that it does not review every transaction that occurs via the third-party DeFi protocols.
For now, the service only allows access to assets that are not flagged as malicious by third-party vendors. This curated system adds an extra layer of protection for users, preventing them from unknowingly interacting with harmful tokens.
Coinbase’s Bet on Brazil’s Crypto Market
The timing of Coinbase’s launch is crucial. Brazil has become an important player in Latin America’s cryptocurrency landscape. With this new feature, Coinbase is offering users faster access to emerging tokens, including Base-native assets.
Despite the regulatory challenges, Coinbase is confident its model will meet Brazil’s requirements. It aims to continue offering decentralized services while adhering to local laws. The feature is expected to improve access to a wider range of assets for Brazilian traders.
Coinbase’s expansion of decentralized exchange access to Brazil is a strategic move. It brings the company’s innovative DeFi capabilities to one of Latin America’s fastest-growing markets. As Brazil’s regulations evolve, Coinbase is poised to adapt its model to remain compliant while providing increased trading options for its users.
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