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You are coming off a big year. Coinbase joined the S and P five hundred Congress asherdon first federal framework for stable coins. I walked past your house in Davos and it said the future of finance is here.
Thank you for repeating the slogan.
Is it really really here though? Or is there a long ways to go?
It is here. Twenty twenty five was a massive year for cryptos. We started to get regulatory clarity finally in the US, so we got the Genius Act passed. In the wake of that, we saw two hundred companies announced stable coin integrations. Financial institutions are adopting this at an insane rate. We now power crypto infrastructure for five of the top twenty largest banks in the world.
It's not just a US phenomenon.
We're seeing incredible adoption of crypto in emerging markets where people have high inflation and stable coins are on a tear. Not to mention prediction markets, et cetera, et cetera. So I do think that we're to break out moment for crypto and yeah, it's a big opportunity.
So who is your second year en Davos, right, Yeah, who are you meeting with? What are your priorities?
Yeah, for twenty.
Twenty six, Well, we're meeting with world leaders to talk about economic freedom and how crypto can help update their financial system. We're meeting with central bank governors talk about what they should do with stable coins. But probably the most interesting one group that I'm meeting with here are other bank CEOs. Because we are having this moment in DC about getting market structured legislation passed, and the bills made good progress. It got a strong bipartisan vote in
the House. It's now being deliberated in the Senate. And there was a little bit of a blow up last week and a little bit.
Of a blow up. Oh right, let's go there. Yeah, it wasn't It seemed a big like a big blowout. But you pulled your support for the bill for.
That current draft.
Yes, yes, Why, well, there was too many giveaways to tradify.
If I can say that, our view is that there should.
Be a level playing field for this is allowed, this is not allowed, And then all the US companies compete and banks didn't like that. They were in my view, like the commercial sides of these banks are very smart and the CEOs get it, and they're talking to us about integrating crypto. The bank lobbying groups and bank associations are out there trying to ban their competition, and I have zero tolerance for that.
I think it's un American.
It harms consumers, and the banks need competition, they need to innovate. We also saw this from some of the securities broker lobbying groups, because you know, tokenized equities are a big thing happening in crypto. So there was three or four kind of redline issues we saw in the draft text. And as I was in DC that day meeting with members of the Senate, I asked them, Okay, is there a path to fix this after it comes
out of committee? And they basically told me behind closed doors, if this comes out of committee where a bipartisan vote, we can't really help you on the full Senate floor. And so I felt like I had to stand up and say something defending our customers' rights. And I was careful not to appunt on what the Senate should do in terms of a markup or not, and I was careful not to say anything. We don't represent the whole
crypto industry, but from a coinbase point of view. I was not comfortable with the draft text as written, and I'm glad that everyone came back for another round of negotiation.
Well, other people have been saying stuff, so since we've we're going here now. A journalist from Crypto in America said, a White House source told her this is President Trump's bill, not Brian Armstrong's spill at the end of the day, and that the White House is going to pull out if you don't come back to the table you push back on this. What's really happening?
Oh yeah, I mean this is not our bill.
Actually, I give all the credit really to the Senate, and certainly President Trump has said that this is a core part of his crypto agenda. So my impression is that the White House is fully leaned in here and wants to get something done, as do we, as do the bank CEOs that I met with today. So I'm not seeing any real barriers here. There's some people who are a little grumpy. I think they got caught off
guard that we didn't support the draft as is. But it's kind of like that metaphor of you know, three blind people looking at an elephant and everyone's trying to figure out. You know, there's probably somebody in the ministration who had that point of view, but that's not the people we're speaking with. I don't think have taken that approach. They actually very much want to get this done.
Now there's this ongoing fighter about whether platforms can reward customers for holding sable coins, which coin is does The banks have argued this is a deposit flight risk. Is that the real sticking point? And what do you think about the flight risk concern?
Yeah, so that's certainly one of the core parts of the debate. I think that some of the bank CEOs I've spoken with have kind of said, hey, we have this really high regulatory burden with being a bank, and what you're doing kind of looks like a bank, and so we think it's super unfair you should have to have a bank license too. And what I tell them is, well,
we're not doing something very important that you do. We do not do fractional reserve lending, which means, for those who don't know, you know, at a bank you deposit your funds, they're not keeping your money there, they're actually lending it out, earning interest on that, and then they pay you a very small percentage of that, like the average savings account makes like fourteen basis points or something, and that's called net interest margin.
And that's the whole bank business model.
And so that's why they have such high regulatory burden, because there can be a run on the bank, Like your money is not all there in a crypto world, there's a one hundred percent reserve, so all your money is there. It eliminates this entire category of risk around a bank run. No such thing as possible if there's one hundred percent of the money there. And so we don't need a bank license. We're regulated by the SEC,
the CFTC. We you know, we have a National Trust Charter, like there's different entities and stable coin issuers can operate under these models as well. And so we've kind of said, you know, we don't need a bank license. That's what currently already exists in the law. The Genius Act even enshrined that further. And so there has to be some other solution here. How do we flip the banks from thinking of this as a threat to an opportunity where we can all go win.
Let's talk about the opportunity. You know, we started off talking about how crypto has had a lot of momentum lately. A lot of that was when crypto was on a tear. The markets have definitely pulled back over the last couple of months. So here, I know this is always your favorite question, but is winter coming?
Well, there's always short term fluctuations in crypto, but I think you know, if you look over the last two years, bitcoin's up like one hundred percent, pretty great outcome for anybody who invested. You know, I've said publicly I think that bitcoin could hit a million dollars by twenty thirty. I still think that's true. So whatever happens in any given week or month, you know, we try it to track it too much. It's the longer term trend that I think is interesting.
So bitcoin hit an all time high last year one twenty five, one hundred twenty five thousand. What about twenty twenty six. Let's do a shorter term for horizon. Where is it going in twenty twenty six?
Well, you know, I don't like to make short term predictions because who knows. It's the market, you know, short term voting machine, long term wing machine, or whatever. So I think I don't think people should be like day trading, you know, unless you really want to do that.
I'm more of a buy and hold kind of guy.
For the long term, and I think that the cool thing about bitcoin is that it doesn't unlike fiat currency. There's no money printer, right, so the supply of it is fixed. It's finite, and so as more people integrate crypto and use crypto, there's more demand and finite supply. That only means the price that it can go up. That's why I said by twenty thirty, I think it could hit a million dollars.
So you wrote a forward to a new paper this week that talks about the tokenizations of things like stocks and bonds, and it's sort of like, you know, you believe that this gives people access to things capital markets that they wouldn't have otherwise had. So, you know, for the average person at home who might think that the stock market is this exclusive club and they can't get in, what's your vision here.
Yeah, So tokenization is kind of a buzzword right now, and it is really important as a trend because the same thing that happened with stable coins, where you know, a dollar got tokenized and now suddenly people all over the world can use it, and there's fast, cheap global payments. The same thing is now happening in the equity market and every kind of asset class really that people might want to invest in. So there's about four billion adults
right now who are unbrokered. You know, some people have heard about being unbanked. There's also about four billion people who are unbroken, meaning that they don't have any way to invest in high quality assets, whether that's American tech companies or the latest black Rock or Apollo fund.
Or anything like that.
And so when you tokenize it, there's a bunch of efficiency gains, but it's also about just democratizing access. And you know, there's sort of like this balance between you know, capital and labor, right and for people who only make their income from labor, they're oftentimes left out of this wealth creation engine, which is the ability to invest some of their hard earned money in high quality assets. So that's what we're trying to do with tokenization of every asset class.
President trumpas said he wants to be the first crypto president. You've been to a few events with him, He's contributed to the ballroom the inauguration. How much time do you spend with him. What is your relationship like when you're advocating for how does he respond?
Yeah, well, I do think he's done a good job of being very crypto forward and helping get some clear rules and legislation pass I go to DC about once a quarter, but that's not really usually to meet with the President's it's to meet with members of the Senate,
our regulators, members of the House. When the bill was going through there alago, No, not yet, but yeah, I mean I've met him a few times and found him to be constructive on this issue, and I think that if this market structure bill doesn't get moving, you know, he may have something to say about that. And I think it's part of his agenda to get this second piece of legislation through.
But what are you advocating for when you do have time with him, and you do have time with the White House.
Getting crypto legislation passed, that's pretty much all we talk about. But legislation that you like, Well, it should be fair for everybody so American companies can win.
That's what he cares about. I think, yeah, well, let's.
Talk of that about that, because clear rules of the road is obviously very important, but a Trump and Malania coin, Like, where do you draw the line.
Yeah, well, you're getting a little above my pay grade on this. I think the Senate, you know, the Senate is deliberating this back and forth. There there's arguments on both sides. You know, there's like ethics rules.
That are already in law.
There's there's ways that presidents and elected officials raise money, like some they sell t shirts or whatever. Our democracy needs to figure this out. It's it's not our it's not our main focus.
Okay, well, let's talk about that democracy. Stable coins are very popular in Venezuela, for example, crucial part of the economy. And there's this sort of lingering question will cryptos sort of be isolated to emerging markets at least in a more mainstream way. Will will they really break out in? What countries are you seeing the most traction and what kind of traction.
Well, you're right that there are emerging markets where people have the least access to financial services and so they have kind of the biggest pain point, and we are seeing a lot of adoption I think by some metrics, like places like India and Turkey and Nigeria are actually like per capita, some of the biggest adopters of crypto. But it doesn't mean it's not going to be used in the United States. I mean, we started in the US.
It's still the vast majority of our revenue, you know, we have there's something like fifty two million Americans who've actually used crypto at this point, so it's a massive, massive user base. I guess what we're seeing now is that people are using Coinbase as more like their primary
financial account. There's kind of the younger generation who are growing up and they want to be able to, you know, deposit their paycheck trade crypto, but they also want to trade stocks, they want to trade prediction markets, they want to trade commodities, you know, they want to send money instantly anywhere in the world and maybe get alone and they can just get access to better financial services through an app like Coinbase.
And so that's what we're trying to build.
Whether we call that the everything exchange, where it's like literally every asset class tradable on one platform. So it's just this is a way to update financial services, and that's very much a US phenomenon as well.
You've said developers who don't use AI at Coinbase will be fired how are they using AI or how are they supposed to be using AI? And what's the AI strategy?
Is anyone not using AI?
I think everyone is at this point. I mean, at least they're trying, right, and so that's all we ask. I mean, we want us to stay on the forefront of these tools. You know, we do have about fifty percent of our code being written by AI now, but of course with human review and strong security controls, and then it's answering about sixty percent of our customer sport tickets. I believe we're using it to automate some back office
functions like compliance. But I actually think the most maybe the most interesting thing, because you know, AI and crypto, I think are the two most important technology trends happening in the world right now, and a lot of people
don't realize they're actually quite complimentary. Because AI agents, increasingly new need to go get work done in the world, which includes making payments and in the traditional financial system, you know, to get a credit card or bank count or something, all the rules and rigs are built around identifying a human being who's linked to that underlying account
or card. And in this new world, AI agents need their own wallets to go and make payments, and so we believe that stable coins and crypto wallets are going to be the default payment mechanism of AI agents. And we've actually built some really cool tools that people have now started to integrate. So eventually, I think AI agents are going to make more transactions every day than humans.
Do you see them, you know, in crypto managing portfolios, executing trades.
Yeah, we launched a prototype of an app or a feature, beta feature I should say, called coin Based Advisor, and it does help people do these kinds of services that are typically available need to networth clients, right, you could say, you know, heart tax loss harvesting and rebalance my portfolio and notify, you know, notify me if the market goes down and there's some good opportunities, and so we do have an AI agent service that people can use for that.
Now you've entered the prediction markets and the you know, associated legal battles. How does this play out and what's the opportunity for coinbase.
Yeah, Well, so it's part of our Everything's change vision. We think everything should be tradable, but prediction markets are of this really important new emerging category.
So i'd say, prediction markets. There's a few parts to it.
So some of it, frankly is people, you know, betting on these outcomes and sporting games and things like that.
That's okay, that's one thing.
The more intellectually interesting part of it to me is that people are also betting on what's going to happen in the next week or two, almost as an alternative to traditional media. You know, sorry not to create a competitive thing here, and they're trying to. So it could be on a political election, it could be what are interest rate's going to be next quarter? It could be
is the Suez Canal going to be reopened? Because I need to understand if I can put my ships through there as a multinational And so people are just trying to figure out what is true, what is going to happen in the future, And what we've found is that there's much higher signal when people have to put skin in the game with real money. So I think that prediction markets are potentially an alternative to traditional media in
some way. The other crazy idea that could emerge here is that I think policy legislators will use it to understand what policy could be best. So, for instance, if there's three proposals, and you want to say which one is going to lower unemployment the most. You can actually put those proposals out where if they aren't acted, and this happens, you.
Could get a payout.
The market will basically give you very clear feedback about which policy they most believe should be implemented, and maybe that helps legislators decide what to do.
As you mentioned, just striving to be this everything exchange, not just prediction markets, but you know, you know trading essentially, Robinhood and others got their first. How much traction are you seeing in some of these newer products.
Yeah, well, we just announced stock trading on coinbase prediction markets back in December, and we've seen really rapid growth of that since then. You know, we also have a number, we actually now have millions of assets, believe it or not, crypto assets you can trade on Coinbase, so it's far ahead of the competition one you mentioned in others. And we also allow people to trade CFTC regulated perpetual style
futures on Coinbase, which is which is unique. So I would say we caught up on the things that we were behind on, and we're actually pretty far ahead on some of the other ones.
President Trump pardon the founder of Finance. Speaking of competition, there's speculation they might try to re enter the United States. How are you preparing for that?
Well, there's a number of crypto companies that grew up internationally that have tried at various points to come into the US.
So far they haven't been successful.
I mean, we have the strongest brand and the most trusted brand in crypto, certainly in the US and a number of other countries where we're the leader. The way I think about this is that our strategy really we call it like our asset accumulation strategy. So because we have the most trusted brand, people feel comfortable storing their assets with us.
We now have about half a trillion.
Dollars of assets, and assets tend to be pretty sticky, you know, people don't move them very often. And if you the more products you can connect into those those assets, people are less.
Likely to churn, right.
So that's why we're offering more trading products and defive borrow leend and coin based card and all these kinds of things, and so we can monetize better. The more products we have plug into those assets, we can invest that back in Backing being the most trusted and this asset accumulation fly will just accelerate.
So we're storing more crypto assets.
Than any other company in the world I'm aware of, by a pretty wide margin, and I think that's going to be defensible for a long time.
You know, there's you know, we talked earlier about winter, and there is this concern that there's a downturn for the crypto market coming. You know, are you doing anything to prepare for that? You know, in an historically Coinbus has been an acquirer in some of these situations. Do you see the potential to make some big buys or like, you know, potential opportunity to consolidate.
Yeah, Well, for just to be clear, I'm not necessarily seeing a crypto downturn coming.
I'm the sure. I think there's just.
Concern because prices have dropped that this could signal that maybe we're in for some more extended lower prices.
To me, that just sort of happens every every month. It's either up or down. So I don't know, I don't think about it too much. But we did acquire I believe ten companies last year, and yeah, there's opportunities in any market. When the market is up, we are just trying to scale and onboard new users and double down on the hype. And you know, when markets are down, we do get a inquisitive we can we could buy back our stock. There's all kinds of opportunities in any market condition.
Now it's interesting because in a room and Davos, your you know, coinbases seems to be the iconoclast, but you know, you're in the in the crypto and the decentralized world. You're closer to banks, closer to politicians than maybe others. How do you manage this sort of various and competing streams and spirits of crypto.
That's that's a great point.
I mean, yeah, I remember in one day sometimes I go speak with, you know, members of the government and bank CEOs, and then I also go to like crypto meetups where there's a bunch of hackers and they're like,
why are you dressed like a banker? And you know, so we try we've tried to be a bridge between the crypto world and the exist traditional financial world because most of the money still resides in the traditional financial system and we need to be a bridge to get more and more of it into the crypto world, so everything can be more efficient and global and cheap.
So, you know, I try to speak. I feel like I'm a translator.
I speak a little bit of bank and I speak hacker, and you know, I try to translate between two.
How have your own leadership skills evolved? I mean, obviously it's been a I interviewed you in the very very early days and seeing you personally evolve, how have you evolved? How have especially as the system has evolve, not evolved and the market just fluctuates madly, Like, how have you sort of maintained your You have a spring wardrobe, a winter wardrobe.
I wear the uniform all, you know, just the same. I wear the same thing to work every day. Unless I'm at Davos or of the East Coast, I wear a suit. But I mean it's like anybody evolves, right I think, you know, I started, I really was. I was a software engineer earlier in my career, kind of shy and introverted, to be honest, and I had never
managed anybody before starting coinbase. And then you know, but you start off and you've got three people and ten people and twenty five people, and there were periods where we went through hypergrowth where I felt like I was in way over my head, you know. And I had a great board around me, I hired some great executives, I had some good executive coaches, you know, but building a company stressful.
We now have about five thousand people.
I certainly I learned from a lot of the great people that were around me in the board and the.
Executives that I hired.
I guess there were certain moments as well where I felt like I had to send something was the right thing to do, but I knew it would it would be controversial, and that's actually where I think that grew the most as a leader. So a couple examples of that where we put out this mission first blog post back in the height of kind of that activist area, and we said that we're not going to do political
activism inside the workplace. We're going to focus on our mission, which sounds kind of obvious now, but at the time that was incredibly controversial. When the sec you know, unlawfully in our view, came out and tried to kill the crypto industry, we sued them. A lot of people told me, oh my gosh, do not sue your federal regulator. That's a terrible idea as a public company. But I knew that the alternative was it would essentially have killed the industry in America, and I couldn't allow that.
So we did sue them and we won. So that was a contrarian view, you know.
I would say, Actually, this market Structure bill last week was another example of that, where I read through the draft text.
Our lawyers were looking at it, and I said, this is wrong.
You know, this would harm consumers in America. To me, it's un American and it's unethical for regulatory capture to happen. I don't care how many bank lobbyists there are or whatever. You know, you can't come in and write a bill that enshrines the incumbent and creates an un level tries to ban their competition. Like, I'm just not going to stand for that. I have zero tolerance, and I'm going
to say it publicly. And it pissed some people off, but I think it's going to help us get to the right outcome on this bill, and I feel that's the kind of leadership that I want to exemplify.
In the world.
All Right, So I've been asking this question about AI, but I'm gonna ask it about crypto. Ten years from now. What is the biggest mistake people in this room will have made about crypto?
Well, I mean, if they don't have at least five percent of their net worth and bitcoin, they're probably gonna be pretty sad. So I think, you know, the last ten years, bioin was the best performing asset class. A lot of people missed out, but it's still early days.
I think, just in.
General, we're going to see crypto update all kinds of financial services. And even if people who don't really care anything about crypto, they don't even know what it is, they're going to benefit from it because they're going to say, oh, well, this is just I can earn more rewards on my money, or I can get a loan for a cheaper rate, or I can send money instantly to my family abroad
out another country without paying eleven percent fees. Or I want to raise money to build a real estate project or a film or whatever a media company and instead of paying you know, ten to eleven percent to some firm to raise money for you can do it instantly on chain. So I think that, yeah, that's where we've been sitting in ten years, with a greatly improved, updated financial system, and hope we get to play a role in creating that.
To the moon, To the moon, all right, Brian Armstrong, thank you
Thank you great