Brian Armstrong, CEO of Coinbase, envisions his exchange becoming something more like the New York Stock Exchange than the digital marketplace it runs today. He shared that vision at TechCrunch Disrup
Brian Armstrong, CEO of Coinbase, envisions his exchange becoming something more like the New York Stock Exchange than the digital marketplace it runs today. He shared that vision at TechCrunch Disrupt SF, outlining a future where Coinbase serves as the global platform for moving between government-issued currency and the tokens flooding the market.
"It makes sense that any company out there who has a cap table should have their own token," Armstrong said. "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."
Coinbase currently lists five cryptocurrencies. Armstrong projects that number could climb into the hundreds or even "millions." If that happens, the exchange would dwarf traditional stock markets in sheer volume and market value.
Getting there faces a wall of regulatory confusion. The SEC and CFTC haven't spelled out clear rules for crypto trading, which has made institutional investors hesitant and left retail investors uncertain. Some observers point to this uncertainty as evidence that the U.S. is falling behind countries like China, which leads in blockchain patent filings according to a Thomson Reuters report.
Armstrong approaches it differently. The key question, in his view, is whether most of these new tokens will be classified as securities under the law. To prepare for that scenario, Coinbase bought Keystone Capital earlier this year, a securities dealer that would let the exchange list tokens classified as securities with SEC oversight.
"We do feel a substantial subset of these tokens will be securities," Armstrong said. "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."
The scale of that potential is enormous. Armstrong said roughly 40 million people participate in crypto now. He believes that could grow to 1 billion within five years, a 25-fold increase. Coinbase has already started preparing for that growth, releasing a framework for institutional investors earlier this year.
