Coinbase’s Bold African Move
Coinbase Global COIN has set its sights on Africa in a bold move toward global expansion.
Strategic Partnership with Yellow Card
What Happened: Coinbase has joined forces with the African stablecoin exchange Yellow Card to broaden its product suite in emerging economies.
The initiative is slated to commence in February 2024 with plans to launch in 20 African countries.
Through this partnership, over 50% of the African population will be able to purchase USDC through the Coinbase wallet app.
Users will enjoy fee-free transactions for sending stablecoins via email and popular social messaging apps such as WhatsApp, iMessage, and Telegram. Coinbase’s Layer-2 blockchain Base will facilitate the purchase of USDC for more economical transactions.
The Significance
The move is aligned with Coinbase’s “Go Broad, Go Deep” international expansion strategy. Africa, with its burgeoning young population, is poised to reap the benefits of cryptocurrency. Reportedly, over 70% of global crypto owners are below the age of 34.
In historical context, Yellow Card has seen significant funding with a $1.5 million raise in August 2020 in a seed round, followed by $15 million in a Series A round in 2021, and a substantial $40 million in a Series B round in September 2022.
Market Outlook
Why It Matters: Market sentiment has been lifted by the groundbreaking approval of a Spot Bitcoin ETF. A Wedbush report has affirmed its outperformance rating on Coinbase, raising the stock’s price target to $180 from $110. The report cited the company’s leadership position in these ETFs.
Mizuho Securities also interprets the approval as a “pyrrhic victory for COIN.”
In recent developments, Coinbase announced its intention to acquire a MiFID-licensed entity in the European Union to expand its derivatives offering. The acquisition is anticipated to be finalized in 2024, contingent on regulatory approval.