Other Coinbase investors include a subsidiary of USAA bank, the investment arm of Japanese telecom NTT DoCoMo and former Citigroup CEO Vikram Pandit. In total Coinbase has raised $106 million, the company said.
Although some small banks have tested cryptocurrencies similar to bitcoin, Coinbase's current round of funding is the first large investment from major banks into the technology, Armstrong said.
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Despite the recent problems for the digital asset—including a sliding price and a costly hacking incident—these investors are doing more than chasing a passing fad, he said.
"They're really excited about it as a technology, and these people are bitcoin believers," Armstrong said. "They're really interested in the potential that it has to make payments fast, cheap and global for everyone around the world."
Some technologists distinguish bitcoin the currency from bitcoin the technology—the digital protocol could be used for a number of financial applications that could potentially involve fiat currencies.
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Armstrong told CNBC that he did not anticipate any of Coinbase's investors acquiring his company in the near future. "We want to stay as an independent company," he said.
Armstrong emphasized that bitcoin's exchange rate (which went from about $1,150 in 2013 to the current level of around $220) was not essential to the success of his company, or its investors. As a provider of bitcoin wallets and facilitator of payments, Coinbase is more reliant on trade volume than daily price, he said.