Founded by Brian Armstrong Coin library 2012. Since then, he has built his company into a dominant crypto brand, with products ranging from wallets to stablecoins to Bitcoin-themed credit cards. Now, Armstrong’s company is entering a very different market: stocks, where it will compete with the likes of Schwab, Fidelity and archrival Robinhood.
The decision to increase its holdings makes Coinbase a “all exchange“Users can invest in stocks, prediction markets, and more. The move makes strategic sense for Coinbase as it could diversify its revenue streams and build a broader customer base — assuming it can pull it off. But that’s far from certain. The most recent one Report pointed out that Robinhood’s stock price, which has mixed stock and cryptocurrency products for many years, has significantly outperformed Coinbase in recent years.
Is it too late for Coinbase to catch up? Armstrong doesn’t think so. In a recent interview, he said that the company is playing a long game and that in an era when all kinds of assets are turning to blockchain, Coinbase will become the cornerstone of the next era of mainstream finance.
“We have deep crypto expertise. We have the most trusted name in crypto. We store more crypto assets than any other company,” he said. “So I think what we’re good at is being the bridge between traditional finance and cryptocurrencies and then allowing tokenized equities to really take off.”
this concept Tokenized shares Still a novel question for most investors. A handful of companies, including Robinhood and Kraken, have offered small amounts of digital tokens that represent claims on real-world stock in companies such as these. apple and Tesla.
Such tokens have some advantages inherent to blockchain. They can be traded on exchanges and settlement is instant, freeing up funds. At the same time, the current issuance amounts to a derivative rather than a stock issue directly on the blockchain, and companies complain that they have not been granted permission to sell shares in this way.
Armstrong said that for now Coinbase will sell shares in the traditional way, but he also expects that one day the shares will be issued natively on the blockchain.
“I think the most interesting (products) are tokenized assets, which are really one-to-one representation that gives you rights to that asset, whether it’s dividends or voting,” he said, adding, “There’s a lot of work to do to figure out the details with the SEC and others. It’s record keeping and rules.”
These details may take time. Congress is currently debating legislation called the Clarity Act, which aims to create a regulatory framework to help integrate cryptocurrencies into the broader financial system. However, this process has become stuck in trouble Armstrong said on Wednesday that Coinbase would withdraw its support for the bill due to last-minute changes, then struck a more conciliatory tone the next day as a spat between the cryptocurrency industry and the banking industry escalated.
As a result, Coinbase will likely focus on issuing shares the traditional way for now, relying on a company called Apex Fintech Solutions to handle the back-end operations. Currently, the inventory is only available to a small group of users, but the company plans to expand the offering to all customers in the coming weeks.
It’s unclear how many Coinbase customers who have signed up to acquire cryptocurrencies are also willing to trade stocks on the platform, or whether the company can gain any significant market share from Robinhood and other incumbents.
“All global markets and tradable assets will move on-chain, and no one is better positioned to lead this shift than Coinbase,” a company spokesperson said.
As for when this shift will occur, Armstrong predicts it will start to happen in the next two years or so, and that it will be new companies that are the first to issue stock this way. In the long term, he predicts that every company will realize blockchain is a superior technology for managing their stocks.
Armstrong added that he would like Coinbase to one day be the first company to pay dividends to shareholders in Bitcoin.