Coinbase Introduces Direct Messaging Feature on Wallet App

Table of Contents

• What can be done with the wallet?
• Coinbase isn't the first with the messaging feature
• What can you do with messaging feature?
• Building through the FUD

This exclusive DM feature has been built using the open-source Web3 messaging network of Texas-based startup XMTP.

Coinbase, one of the biggest cryptocurrency exchange platforms, has launched an encrypted messaging service on its self-custodial wallet app. This messaging feature has been built using the open-source Web3 messaging network of Texas-based startup XMTP. This service will be initially made available to a small group of users. Ethereum addresses will be able to communicate with each other in a human-readable manner.  

What can be done with the wallet?

The message feature allows NFT and POAP holders to connect with others who own the same digital assets through direct messaging. This feature will elevate the wallet from mere key holders into a highly interactive platform. It may even evolve into become identities for the wallet holders. All messaging is encrypted, ensuring user privacy. 

Coinbase isn't the first with the messaging feature

Coinbase isn't the first to explore Web3 messaging, but it definitely is the largest one so far. Coinbase wallet has a staggering 1.3 million users worldwide. Using the wallet, Coinbase users will be able to move over their conversations from any of the ~450 applications built on XMTP to the Coinbase Wallet. Do note that the messages aren't recorded on-chain, meaning they are not stored as transactions. Instead, XMTP messages travel across nodes managed by XMTP Labs.

What can you do with messaging feature?

Users can leverage the messaging feature to make crypto payments, similar to PayPal's Venmo or Block’s Cash App. While the feature will support "thousands of coins" at launch, users who conduct transactions in the USDC stablecoin won't have to pay gas fees. Coinbase wallet users will also have access to personalized wallet labels through Coinbase Decentralized ID (cb.id) – created in collaboration with the Ethereum Name Service (ENS).

Building through the FUD

Coinbase is currently entangled in an ugly lawsuit with the US SEC. On June 6, 2023, when the US regulatory body filed charges against Coinbase, claiming that the crypto exchange had offered investors unregistered securities since 2019. The “unregistered securities,” in this case, were several cryptocurrencies. Coinbase’s responded by saying that the SEC lacks the jurisdiction to regulate the crypto exchange’s activities.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.