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Ask Coinbase Anything at Money2020

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This year’s Money2020 has seen some slight differences from past editions of the event. This week, different ‘Rockstars are walking Money2020’s stages’, and one of the firms to pull in the crowds is Coinbase.

#DisruptionBanking covered the much heralded IPO of Coinbase earlier in 2021. Some said it would be the biggest IPO in the history of the world,. But it didn’t quite live up to expectations:

One of the differences in the way that this year’s Money2020 has been organized is the availability of the Speakeasy room where a small group of fintech nerds can #AskMeAnything from selected speakers. One of those speakers was Marcus Hughes, the Managing Director of Europe for Coinbase, and the editorial team at #DisruptionBanking were delighted to be invited to hear what he had to say:

Editorial people are not ones to turn down a good cocktail, even at 13.35 in the afternoon. With the esteemed David G.W. Birch sitting down with Marcus in front of a set of dimmed lights, cosy fireplaces and some traditional cocktails, the scene was set. David and Marcus didn’t disappoint.

Marcus started by sharing how he believes the average person is now aware of crypto assets. They may not fully understand it, but the awareness is definitely there. Even institutional investors have undeniably moved into the space.

Marcus went into more detail, and with Coinbase there is always a little more detail to go into:

“I think what’s also interesting it that when you talk about crypto, speculation over bitcoin and investment into crypto assets is just one aspect. Clearly the amount of bitcoin traded is significant, but there’s much, much more to it than that. There’s the utility cases for crypto. You’ve got central bank digital currencies, you’ve got stable coins. You have many more use cases than have previously existed.

“I think what’s happened is that the ecosystem has got a lot more complex. Back in 2012, when Coinbase was founded, it was just a platform to buy and sell bitcoin. Now we are a company at the heart of the crypto ecosystem offering a whole range of services.” Marcus concluded.

David came back with a question about how people in the wider economy are still not using bitcoin as a payment method, and how it appears to be more of an institutional asset. Marcus helped to clarify:

“It’s still relatively early days, and it also depends on your philosophical view.” He said pointing to recent developments in Japan. He continued by raising the spectre of inflation and how use cases in developing countries are vastly different to problems consumers are facing in Europe.

A discussion about cryptocurrency wouldn’t be complete without discussing the newest trends surrounding #DeFi, an area that Coinbase have been developing recently:

Not all of Coinbase’s new initiatives are going according to plan, but the trend to embrace the way that decentralized finance works is clear. Marcus believes that lowering the friction in the traditional finance space is one of the areas where stable coins will help. And this will be just one of the many use cases that is evolving from the Fintech space: “I think we’ll see the use cases for crypto being better understood. Right now there’s undoubtedly the kind of perception that it’s really just an investment class. But I think we need to make the case for the raft of other ways in  which crypto can drive change.”

David asked Marcus to tell him how Coinbase was diversifying their products, something that many of the audience were also interested in finding out about.

Marcus explained how month on month the team at Coinbase are diversifying revenue, as the crypto space becomes broader. In fact, just this week one of the new products of Coinbase was a topic of debate:

No conversation with a leading figure at a crypto exchange could be complete without talking about regulation. In the case of Coinbase, this is more about the SEC than any other regulator. Recent clashes with Ripple and Tether by the U.S. Regulator have highlighted just how sensitive this area is. Uniswap, a stalwart of the DeFi ecosystem, has also had to contend with the SEC in the recent past.

Marcus explained how Coinbase has always embraced the right kind of regulation, and how they have always strived to be the ‘most trusted and easiest to use’, sentiments not lost on retail investors. Marcus shared how Coinbase representatives proactively engage with regulators, especially as new ideas and products that people aren’t familiar with arise:

“Countries will have to deal with that in different ways. Some countries like to outright ban crypto, other countries take a ‘wait and see’ approach. As an industry we need to take the initiative and have these conversations.”

Whatever the future might hold, for DeFi, CBDCs, Crypto itself and the whole range of products we are yet to see, you can be sure of one thing. Coinbase will be at the forefront of both regulatory change and product innovation. Seeing their senior team speak so openly at industry events is a great sign of what the future holds, for Coinbase at least.

Maybe Binance, Kraken and others will join Coinbase at future Money2020 events?

We shall have to see.

Author: Andy Samu

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