Coinbase CEO Lays Out Plan to Dominate Crypto Securities Marketplace
Coinbase CEO Brian Armstrong has stated that, in addition to being the most popular cryptocurrency exchange in the U.S., the company eventually intends to grow into an organization that resembles the New York Stock Exchange (NYSE). Speaking at the TechCrunch Disrupt SF event in San Francisco, Armstrong highlighted his vision for the company, which includes a scenario where it becomes the de-facto platform for an ever-expanding number of cryptocurrencies. Tellingly, over and above its current status as the most popular exchange for fiat/crypto trading pairs in the U.S., Coinbase also plans to become the base of alternative investment financing in the years to come.
Explaining why he believes in the probability of such as scenario he said:
“It makes sense that any company out there who has a cap table… should have their own token. Every open source project, every charity, potentially every fund or these new types of decentralized organizations [and] apps, they’re all going to have their own tokens. We want to be the bridge all over the world where people come, and they take fiat currency, and they can get it into these different cryptocurrencies.”
According to Armstrong, such a crypto-positive future could see Coinbase exponentially multiply its current list of five supported cryptocurrencies, expanding to hundreds and even “millions” in his words. If that were to happen, Coinbase could become a financial powerhouse, possibly bigger than the NYSE and the NASDAQ.
A primary roadblock on the way to this vision of a crypto-dominated future is the current regulatory stasis surrounding crypto markets in the U.S.
Many investors continue to complain about the absence of a clear and unambiguous framework of regulations for crypto trading from regulators like the Securities and Exchange Commission (SEC) and the Commodities Future Trading Commission (CFTC) which delays the entry of institutional investors, in addition to discouraging existing investors from engaging the market further.
Some argue that the U.S. is effectively losing the innovation race to overseas markets – an argument that might be supported by a recent Thomson Reuters report showing that China is now the undisputed leader in new blockchain technology patent registrations. While Armstrong does not necessarily agree with that position, he did mention at the event that there is an “open question” over whether the majority of the new rush of tokens he foresees will be securities or not.
That notwithstanding, Coinbase continues to make moves to list security tokens on its platform, acquiring Keystone Capital—a securities dealer earlier this year—in a bid to offer blockchain-based securities, under the oversight of the SEC.
Sharing his thoughts on the listing of security tokens on Coinbase, Armstrong said:
“We do feel a substantial subset of these tokens will be securities. Our approach has always been to be the most trusted [exchange] and the easiest to use. So we want to be the legal compliant place where you can start to trade these tokens that are classified as securities. Web 1.0 was about publishing information, web 2.0 was about interaction, and web 3.0 is going to be about value transfer on the internet because now the web has this native currency and so applications can be built that instantly tap into this global economy on the internet.”
When probed about the growth potential of the crypto ecosystem, Armstrong said he believes the number of people involved in the crypto ecosystem, in one way or another could hit 1 billion in five years, which is 25 times more than the current figure of roughly 40 million.
Earlier this year, Coinbase published a framework to help its institutional crypto investment business lines as the company continues to break new ground in search of continued growth.