Coinbase CEO Brian Armstrong on International Expansion and Regulatory Challenges

Strategic Focus on International Markets

Brian Armstrong, the CEO of Coinbase, appeared on CNBC’s Power Lunch to discuss the company’s international expansion efforts. Armstrong highlighted that 83% of G-20 countries are either in the process of implementing cryptocurrency legislation or have already done so. He emphasized that Coinbase is directing its resources toward these international markets, citing recent launches in Canada and the introduction of an international derivatives exchange.

When asked about possibly discontinuing U.S. operations due to regulatory hurdles, Armstrong stated, “America is going to get this right.” He also noted that important bills with bipartisan support are currently under review in the House of Representatives, indicating that Congress realizes the need to establish clear rules for the crypto industry.

U.S. Regulatory Landscape and Public Opinion

Armstrong expressed disappointment with the U.S. Securities and Exchange Commission (SEC) for its lack of a clear regulatory framework for cryptocurrencies. He emphasized that this regulatory ambiguity does not reflect the will of the American people. Armstrong pointed out that approximately 56 million Americans, or about 1 in 5, have engaged with cryptocurrency. He used this statistic to underscore that cryptocurrency has become mainstream in American society, noting that the figure is five times greater than the number of Americans who own electric vehicles.

Armstrong criticized the SEC’s approach of regulating through enforcement actions rather than through a legislative framework. He warned that this lack of clarity has led to negative consequences, including crypto businesses moving offshore and a decline in America’s financial and technological leadership. Armstrong also stated that the absence of clear rules has resulted in “terrible things” such as exchanges blowing up.

Judicial Support and Industry Fairness

Armstrong praised the U.S. judicial system for its role in upholding the rule of law in the crypto industry. He cited a recent court ruling that found the SEC’s actions against Grayscale to be “unlawful” and “arbitrary and capricious.” Armstrong believes that such rulings instill confidence in the industry and emphasized that the judicial branch has been effective in upholding the rule of law in the crypto space.

Bitcoin ETFs and Their Impact on Coinbase

Discussing the potential impact of Bitcoin ETFs, Armstrong stated that Coinbase has been named as the custodian in numerous ETF applications. He believes that the introduction of ETFs will not only bring new capital into the crypto ecosystem but will also be beneficial for both the industry and Coinbase.

Expanding the Crypto Ecosystem

On the topic of business competition and revenue, Armstrong clarified that he hasn’t observed any margin compression in the industry. He stressed that Coinbase’s primary goal is to expand the overall size of the crypto market. Armstrong envisions crypto being integrated into every financial service firm, fintech company, and emerging Web3 platforms, stating that he doesn’t view it as a competitive threat but rather as an opportunity for growth.