Coinbase Custody Joins Forces with Kalshi to Strengthen Trust and Security in Prediction Markets

Kalshi and Coinbase Custody have partnered, with Coinbase Custody selected to safeguard the USDC reserves used on the Kalshi platform. Kalshi revealed that Coinbase Custody will now handle all USDC deposits, settlements, and payouts on the platform. This integration matters because it introduces institutional-grade security and operational strength to a market that has often struggled with trust and transparency.

Prediction markets have historically faced credibility issues, mainly because many platforms lacked strong oversight or consistent settlement systems. Kalshi stands out because it operates under the supervision of the U.S. Commodity Futures Trading Commission (CFTC), making it one of the first fully regulated exchanges for real-world event trading.

By bringing Coinbase Custody into the process, Kalshi gains a secure and transparent environment for handling USDC, the stablecoin used for most of its trades. USDC offers price stability compared to typical crypto assets, which makes it a more reliable medium for event contracts. Instead of worrying about sudden price drops or volatile collateral, users can focus entirely on the events they are trading. For prediction markets to gain mainstream acceptance, this type of stability is essential.

This collaboration is more than a simple service integration. For Coinbase, it signals a shift toward building deeper financial infrastructure for Web3 as a whole. As the custodian of USDC used in Kalshi’s markets, Coinbase is not merely offering access to crypto; it is strengthening the foundational layer of a new form of financial trading.

Jane Manchun Wong, a well-known tech researcher who often uncovers new features before they launch, posted to X that Coinbase is “working on a prediction market.” She also shared several screenshots that seem to show what the new platform might look like.

Despite the potential, prediction markets face challenges. One issue that recently came into the spotlight involves the possibility of influencing market outcomes. During a quarterly earnings call, Coinbase’s CEO mentioned several crypto-related words that happened to match active Kalshi and Polymarket contracts. This sparked debate about whether certain event markets could be affected by individuals directly involved.

Regulation is another ongoing challenge. Kalshi is fully licensed in the United States, but prediction markets are treated very differently across other countries. As more users from around the world join these platforms, companies like Coinbase and Kalshi may face increased legal scrutiny and operational complexity.

Kalshi’s decision to use Coinbase Custody for safeguarding USDC brings a new level of trust, stability, and professionalism to prediction markets. By pairing regulated event trading with secure crypto infrastructure, both companies are helping shape a more reliable future for this growing sector. While challenges around influence and regulation remain, this partnership shows that prediction markets are steadily moving toward greater legitimacy and wider adoption.

Do you think partnerships with regulated and secure providers like Coinbase will help prediction markets become a mainstream financial tool?