Coinbase CEO Interview: Holding Broker-Dealer License, Aims to Collaborate with SEC to Launch Securities Trading Market

Brian Armstrong accepted an interview with Bloomberg, emphasizing Coinbase's strong desire to collaborate with regulatory bodies such as the SEC to bring compliance to the cryptocurrency industry. He also mentioned recent enforcement actions and regulatory pressures involving Kraken, BUSD, and others.

Would Traditional Financial Players Worry About DeFi?

Armstrong pointed out that traditional financial groups such as JPMorgan Chase, Franklin Group, Mastercard, and Visa have internal teams dedicated to integrating cryptographic technologies.

He believes the fundamental reason is that there is room for improvement in the financial system, with about 80% of Americans dissatisfied with related services, citing slow transactions, high fees, unfair services, and many technologies built 40 years ago with regulations dating back a century.

Armstrong does not want the U.S. cryptocurrency industry to fall behind again, as in the case of 5G and semiconductor fields. He hopes the financial system can integrate cryptocurrencies. Therefore, he has spent more time with law enforcement agencies in Washington, meeting with relevant individuals to assist in drafting legislation.

Tokenizing Securities, Coinbase: Broker-Dealer License Obtained

The host mentioned that many traditional financial players are researching tokenizing securities. Could this be realized in 5 years?

Armstrong believes tokenizing securities is a significant market. In fact, Coinbase also holds a broker-dealer license for securities, but it has been dormant. They hope to work with the SEC to officially activate this license and create a structurally healthy securities trading market.

SEC Enforcement Actions, How Does Coinbase Benefit?

Armstrong pointed out that as a publicly listed exchange, audited and qualified custodian, Coinbase actually benefits from a series of regulatory crackdowns by the SEC and is the preferred partner for hedge funds seeking collaboration.

He also mentioned this in the Q4 financial report, noting an increase in institutional participation:

These institutions have not yet deployed a large amount of cryptographic assets. Although the current market environment makes them cautious, they are still pleased to see them attempting to enter the market. I believe institutions have sufficient explosive potential in the next market phase.

Who Should Regulate Stablecoins?

Armstrong believes Congress will ultimately introduce a stablecoin bill, so he expects to deploy compliance strategies for the bill. He feels no need to provide input on the bill, but conditions such as 100% reserves and audited financial reports are necessary and uncontroversial.

He also mentioned the news of Coinbase delisting BUSD, citing concerns about low liquidity rather than other suspicions.

Kraken's Staking Resembles Profit Products More

Armstrong once again emphasized the difference between its staking service and Kraken's, with the latter resembling a profit product more, while Coinbase's staking service merely assists users in staking and does not fall under securities.

Regarding potential resistance with regulatory agencies, he stated:

If necessary, we are prepared to fight in court, but we will never resort to aggression. Coinbase wants to cooperate with global regulatory agencies and hopes for clear regulations. We are willing to comply with the rules.

Meetings with SEC Chairman, Multiple Conferences Held

Armstrong revealed that Coinbase has actually held dozens of meetings with the SEC, maintaining a good relationship with SEC officials. They have met with the SEC chairman and explained the exchange's business scope multiple times, leading to the SEC approving Coinbase as a publicly listed company two years ago.

Regarding ongoing subpoenas from the SEC and state-level regulatory agencies, Armstrong explained that after receiving a subpoena, all they need to do is provide accurate information. Therefore, Coinbase is engaging in dialogues with both federal and state-level regulatory agencies simultaneously.

Armstrong concluded by emphasizing that Coinbase and the SEC actually share common interests, both aiming to bring the cryptocurrency industry under regulatory oversight to provide better consumer protection mechanisms.