Coinbase CEO: “We Are Intending To Become People’s Primary Financial Accounts”

At the 2024 Crypto Summit, CNBC’s Kate Rooney had an insightful conversation with Coinbase Co-Founder and CEO Brian Armstrong.

Armstrong highlighted the increasing acceptance of digital assets among major financial institutions. He noted that a significant portion of Fortune 500 companies are now involved in blockchain technology. Examples include BlackRock’s efforts to tokenize real-world assets, JP Morgan’s blockchain initiatives with their Onyx platform, Google Cloud’s acceptance of crypto payments, and the integration of stablecoins by FinTech companies like Stripe and PayPal.

He said:

“Fifty-six percent of the Fortune 500 are now doing something on-chain and we go and survey executives from those companies, so the biggest companies in the world whether it’s BlackRock tokenizing real-world assets, JP Morgan is doing things on-chain with Onyx, Google Cloud is accepting crypto payments, FinTechs like Stripe and PayPal are doing things with stablecoins. So I think crypto is here to stay, and the biggest companies in the world are all integrating it.”

While Bitcoin remains a cornerstone of the crypto ecosystem, acting as digital gold, Armstrong emphasized the growing importance of other crypto assets. Coinbase supports a couple hundred different assets on its platform, reflecting the diverse applications of blockchain technology. Armstrong says that stablecoins are being used for medium-of-exchange purposes, and Ethereum is enabling the development of decentralized applications (dApps) and decentralized social platforms. Armstrong envisions a future where a few major blockchains support millions of different tokens, indicating a robust and varied crypto ecosystem.

Coinbase’s base, an Ethereum layer 2 solution, addresses the scalability issues of original blockchains. Armstrong compared this evolution to the transition from dial-up to broadband internet. Layer 2 solutions make blockchain transactions faster and cheaper, facilitating wider adoption. He also discussed the potential approval by the U.S. SEC of spot Ethereum ETFs, which would represent another significant step in the mainstream acceptance of crypto. Armstrong noted that major financial institutions like Morgan Stanley and UBS have not yet fully integrated spot crypto ETFs, suggesting substantial future growth.

The conversation shifted to the political arena, with Armstrong discussing his interactions with U.S. Senators and the broader regulatory environment. He mentioned that there is growing bipartisan support for clear crypto regulations driven by voter demand. Armstrong refrained from endorsing any presidential candidate but stressed the importance of voters understanding the crypto positions of different candidates. He mentioned a resource platform designed to help voters educate themselves on the topic.

Armstrong articulated a vision for Coinbase to become people’s primary financial account, similar to a digital bank but without the traditional fractional reserve system. He foresees a future where mobile phones act as wallets, replacing traditional bank accounts and checkbooks. Armstrong described the digitization of money, where mobile money on phones will serve as bank accounts for future generations. He believes these mobile wallets will be the primary means through which people get paid, live their lives, and borrow money if needed.

He said:

“In the banking world, they do something called fractional reserve and it has its own regulatory requirements for that. We’re not intending to become a bank, but we are intending to become people’s primary financial accounts … And so, the digitization of money and having mobile money on your phone – your phone is your bank account in the future. There’s going to be a whole generation of kids who grew up and they’re not going to have a bank branch on the corner with a checkbook in the way that maybe you and I did growing up. Their phone is going to be their wallet. That’s how they get paid. It’s how they live their lives and borrow money if and when they need to.

“So that’s the opportunity for Coinbase, and we have the beginnings of that with Coinbase Card for instance, which lets you spend. We have USD Coin if you want to hold US dollar balances. And in the future, you can imagine us adding other features like the ability to send a wire transfer or bank transfer, and then it could really be your primary financial account.“

Featured Image via Coinbase