> Its primary purpose is not to hold other people's bitcoins
Wrong. There's a reason they call one of their services a "wallet" - because they hold other people's bitcoins. And guess what, they now have a USD wallet too, for storing other people's USD (http://avc.com/2015/01/feature-friday-us-dollar-wallet/)
And as gnaritas said, they are not an exchange, they have a broker service.
Those things are a means to an end, the company doesn't exist to hold people's money. Banks do, since they loan out money at a fractional reserve. Coinbase makes money by btc going through them. Of course they have to hold bitcoin and of course it is more advantageous to hold some USD so people can trade instantly.
The original post was about them being like a bank, which is not true in the context of their business model.
> Those things are a means to an end, the company doesn't exist to hold people's money
Yet. Like the OP said, "Next up they'll probably offer interest and loans/mortgages". Who knows what else they'll divert their attentions to (hint: it's probably where the money is).
Coinbase seems to be going for the Payment Processor route, now with the USD wallet who knows if they'll offer you a CC just like Xapo. Guess who else offers you CCs?
Wallet isn't something Coinbase came up with, it's a Bitcoin term. A wallet, or more specifically a wallet address, is an account number that's used to send and receive Bitcoins.
Wrong. There's a reason they call one of their services a "wallet" - because they hold other people's bitcoins. And guess what, they now have a USD wallet too, for storing other people's USD (http://avc.com/2015/01/feature-friday-us-dollar-wallet/)
And as gnaritas said, they are not an exchange, they have a broker service.