Speaker 1: The crypto back loans today allow people to essentially borrow
Speaker 1: against bitcoin that they have in their coin base account,
Speaker 1: so they can get instant liquidity without selling the bitcoin.
Speaker 1: Staking empowers our users to allow financial freedom by partaking
Speaker 1: in the cryptoeconomy, earning rewards on their stakable crypto assets.
Speaker 2: What are your thoughts on the toganization market. A lot
Speaker 2: of these firms looking to put a lot of different
Speaker 2: things on the blockchain, whether it be stocks, gold, and
Speaker 2: other assets.
Speaker 1: Ultimately, on chain economy is one that people are viewing
Speaker 1: as increasingly powerful.
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Speaker 2: link in the description. Hey, folks, welcome into the Thinking
Speaker 2: Crypto podcast. I'm your host, Tony Edward, and joining me
Speaker 2: today is Ben Sheen, who is the head of Financial
Speaker 2: Services and Loyalty Products at Coinbase. Ben.
Speaker 1: Great to have you, hey, Tony, great to be here.
Speaker 1: Excited to chat coinbase and all the products that we're
Speaker 1: enrolling up.
Speaker 2: Yeah. Absolutely, man, You and the folks at coinbase been
Speaker 2: doing a lot of work. There's a lot of cool features,
Speaker 2: new things have been launched, and you know, one of
Speaker 2: the big milestones you folks have hit recently Ease, which
Speaker 2: your crypto back loans crossing over a billion dollars, which
Speaker 2: is pretty incredible. Well, before we get to all of that,
Speaker 2: tell us a bit about yourself, where you're from and
Speaker 2: your professional background. Cool.
Speaker 1: So I was born in the United States, my parents
Speaker 1: were doing their graduate studies, but I grew up properly
Speaker 1: in Taiwan, so moved back when I was around two
Speaker 1: years old. Had an international education until my high school graduation,
Speaker 1: and then moved over to backstate side to go to
Speaker 1: Columbia for my undergrad studies. And then in terms of
Speaker 1: sort of like other background, prior to joining coinbase, I
Speaker 1: started my career on traditional financial services. I was a
Speaker 1: equity derivatives or volatility trader on the Goldman SAX trading floor,
Speaker 1: and then I moved into an operating role at some point,
Speaker 1: but between that spent some time as a cross capitol
Speaker 1: structure investor, so investing across high yield distressed equities. I
Speaker 1: held to stress debt as well as equities, capital structure, arbitrage, etc.
Speaker 1: As an analyst looking at different industries, and then back
Speaker 1: in around twenty sixteen, got interested in being an operator,
Speaker 1: so being in the ring and building rather than say
Speaker 1: betting on the fight, so to speak. So around that
Speaker 1: time I had joined what was then Square Cash now
Speaker 1: cash App. It was a fledgling sort of ten person
Speaker 1: strong startup within then Square now Block, competing really with
Speaker 1: Venmo on the P to P space, So wore a
Speaker 1: lot of different hats on that journey, you know, really
Speaker 1: thinking about how we scale this business, expanded beyond period
Speaker 1: a peer into things like you know, users today can
Speaker 1: get a debit card, they can direct deposit their paychecks
Speaker 1: and millions of people do. They can save, they can
Speaker 1: invest in a whole suite of financial services. So was
Speaker 1: there helping build that business from the ground up for
Speaker 1: the better part of about nine years, and then back
Speaker 1: in May came to coinbase and started a new adventure
Speaker 1: building out our financial services and loyalty products.
Speaker 2: Oh that's awesome, and you know your background, it's so funny.
Speaker 2: It touches on some of the key factors that are
Speaker 2: so relevant in crypto. You mentioned being at cash app
Speaker 2: and the peer peer aspect of that and fintech and
Speaker 2: you know, changing the way banking and financial services are
Speaker 2: doing it. And you were also in tradfy and all
Speaker 2: those things are so prominent now at crypto and obviously
Speaker 2: in what coinbase is trying to do. Yeah.
Speaker 1: Absolutely, I feel like all the worlds are in some
Speaker 1: ways converging. Yeah, and there's a lot of let's say,
Speaker 1: pattern recognition from you know, my former lives that I
Speaker 1: definitely bring into the role I'm in today.
Speaker 2: Along the way, when did you first discover bitcoin or
Speaker 2: crypto and what was your aha moment? When did it
Speaker 2: click for you?
Speaker 1: Yeah, it was about twenty sixteen, you know, when I
Speaker 1: joined cash app. So basically at the time, you know,
Speaker 1: the overall ethos was around economic empowerment, you know, innovating
Speaker 1: on the boundaries of money itself as well and offering
Speaker 1: capabilities to users. In twenty seventeen, cash op actually introduced
Speaker 1: bitcoin trating, bitcoin trading, and bitcoin investing.
Speaker 2: To its users.
Speaker 1: So as part of that played a role in thinking
Speaker 1: about the strategy how we would roll it out to
Speaker 1: our user base, and got really interested in just bitcoin,
Speaker 1: read the white paper, got personally invested, and then of
Speaker 1: course from there the rabbit hole goes really deep. So
Speaker 1: started to understand you know, different you know, different parts
Speaker 1: of the crypto ecosystem across ethereum, Salona, et cetera, and
Speaker 1: over the years have just continued learning. Of course, there's
Speaker 1: a lot of ethos around the cryptospace, trying to do
Speaker 1: a lot of the same things around you know, serving users,
Speaker 1: leverishing the superpowers of you know, being permissionless, instant money movement,
Speaker 1: and a lot of the stuff that I'm sure we'll
Speaker 1: talk about today.
Speaker 2: Oh absolutely, let's talk about the crypto backloge loans program
Speaker 2: or product that coinbase has, because you guys recently cross
Speaker 2: a huge milestone with users borrowing more than a billion
Speaker 2: dollars and the locking of over one point three billion
Speaker 2: in bitcoin or collateralized bitcoin. Tell us about the growth
Speaker 2: of this product and obviously maybe a bit of a background,
Speaker 2: what is it and how people can use it?
Speaker 1: Yeah, so, in a nutshell, the crypto back loans today
Speaker 1: allow people to essentially borrow against bitcoin that they have
Speaker 1: in their coin Base account, so they can get instant
Speaker 1: liquidity without selling the bitcoin of say incurring capital gains
Speaker 1: or really just they just want to hold onto their bitcoin,
Speaker 1: but they have everyday needs, whether that be you know,
Speaker 1: purchases in their everyday lives. We've seen some users make
Speaker 1: large discretionary purchases like a car or even a home,
Speaker 1: or potentially paying down other debt which is more expensive
Speaker 1: and really a whole myriad of use cases. So what
Speaker 1: a user can do is they can go into the
Speaker 1: Coinbase app. They can you know, either use the bigcoin
Speaker 1: they have, or of course they can trade and buy
Speaker 1: the bitcoin and then they can instantly look at, you know,
Speaker 1: input how much they want to take in terms of
Speaker 1: a loan against that bitcoin as collateral of specifying certain
Speaker 1: things around loan to value see the borrowing rate. And
Speaker 1: then the bitcoin is then locked up in a smart
Speaker 1: contract via our integration with Morpho, and the user will
Speaker 1: have that USCC immediately which they can use. So it
Speaker 1: is truly a much faster product. The rates are very
Speaker 1: competitive relative and lower than what a lot of a
Speaker 1: lot of other you know, alternate venues to the same
Speaker 1: liquidity provide. And we've seen users really really just use
Speaker 1: the use the feature for all kinds of needs. So
Speaker 1: I guess like we've scaled now to as you mentioned,
Speaker 1: over a billion dollars in all time originations, and of
Speaker 1: course that's you know, less than a year after we've launched.
Speaker 1: And in terms of collateral, I think we're now probably
Speaker 1: at like one point four maybe go on one point five
Speaker 1: billion and bitcoin collateral. So it really is this you know,
Speaker 1: really market improvement over the way a lot of other
Speaker 1: people might otherwise get liquidity through the tract by system.
Speaker 2: Oh for sure. So is it a combination of retail
Speaker 2: investors as well as institutions that are using this product.
Speaker 1: So all the numbers we talked about are the retail
Speaker 1: users using the Coinbase app for their personal accounts and
Speaker 1: so like. Of course, the borrowing customer job, so to speak,
Speaker 1: is one that spans obviously both retail, institutional et cetera.
Speaker 1: And there are other parts of coinbase that are serving
Speaker 1: those needs though like not factored into the numbers that
Speaker 1: I just mentioned.
Speaker 2: So let's say take myself as an example. I have
Speaker 2: maybe a few bitcoin and Coinbase, and I want to
Speaker 2: take out a loan to do some upgrades to my
Speaker 2: house or I don't know, pay for to a certain
Speaker 2: my daughter's college scholarship or whatever or tuition. I should say,
Speaker 2: walk us through that process. I'm what percentage of bitcoin's
Speaker 2: value am I getting a loan off of? And what
Speaker 2: happens with the market volatility? How is that taken into account?
Speaker 1: Yeah, so you can specify a loan to value for
Speaker 1: your the loan that you want to take out. Of course,
Speaker 1: we have guardrails, right, so we really sort of set
Speaker 1: the guardrails to make sure that users are you know,
Speaker 1: taking responsible action. Th Ultimately, it's on the user to decide.
Speaker 1: For example, if I launch you know the defive borrow
Speaker 1: functionality and coinbase, say like I could set a fifty
Speaker 1: percent loan to value. So let's just say I have
Speaker 1: a one hundred thousand dollars in bitcoin in the account,
Speaker 1: I could take a fifty thousand dollars loan, right, get
Speaker 1: fifty thousand and USDC proceeds and in your case, for example,
Speaker 1: use it to pay that tuition. And then in the app,
Speaker 1: we will show you the loan to value based on
Speaker 1: the price of bitcoin and the fluctuations, so you'll see
Speaker 1: the health of the loan, right.
Speaker 2: So for example fair good.
Speaker 1: And then we also have user facing notifications when there
Speaker 1: are market where there's market volatility, where there's the potential
Speaker 1: for the collateral to be liquidated or sold. Right that way,
Speaker 1: a user can come on and they can decide to
Speaker 1: repay the loan, right, they can decide to add more collateral.
Speaker 2: So these are all.
Speaker 1: Sort of like user facing pieces of functionality we give
Speaker 1: you so you can get that liquidity and then also
Speaker 1: of course manage against that bitcoin collateral as you see fit.
Speaker 2: Got it. And as far as terms is, there are
Speaker 2: there terms on being able to borrow. Is it like
Speaker 2: five like how the mortgage terms are or a car
Speaker 2: loan terms are.
Speaker 1: So today it's they are open ended floating rate terms.
Speaker 1: So I think today, if you just open that today,
Speaker 1: you can borrow at seven and a half percent, once again,
Speaker 1: really competitive versus a lot of the alternatives you'll see.
Speaker 1: And you know, the supply and demand essentially in the
Speaker 1: market will determine the rates, right, so a user can
Speaker 1: kind of monitor the rates. As we continue building out
Speaker 1: the feature and functionality, you can expect that we can
Speaker 1: think about additional parameters and things that could sell serve
Speaker 1: different needs for users. So, but today it is open
Speaker 1: ended floating rate terms.
Speaker 2: So open ended, so I could pay us back in
Speaker 2: whatever time frame I want.
Speaker 1: Yes, And and we ultimately believe that there's just this
Speaker 1: really wider range of potential needs.
Speaker 2: Right.
Speaker 1: You might look to pay off your daughter's tuition in
Speaker 1: advance of a paycheck that you might receive in let's
Speaker 1: say two weeks, right, And after two weeks you may
Speaker 1: want to pay it down and sort of like get
Speaker 1: the collateral back and no longer have a loan outstanding.
Speaker 1: As I mentioned, we have seen you know, purchases even
Speaker 1: up to a home, in which case they're actually taking
Speaker 1: that in lieu of let's say a thirty year mortgage, right,
Speaker 1: And so in that case, you know that that user
Speaker 1: may or may not want to pay it down. You know,
Speaker 1: in the immediate term, they might actually want to keep
Speaker 1: it that loan outstanding in the same way that they
Speaker 1: would right if they had gone to let's say like
Speaker 1: a ba A or Wells to get a long term martgage.
Speaker 2: Oh wow, yeah, that's such a great option. I mean
Speaker 2: to be able to do things like I buy a home.
Speaker 2: So I think you may have addressed this, but I
Speaker 2: want to make sure I wrap my head around it,
Speaker 2: and even for the users who are watching listening, because
Speaker 2: this is, you know, brand new to a lot of folks.
Speaker 2: So let's say I have three bitcoin on coinbase, right,
Speaker 2: and the value is like over three hundred thousand based
Speaker 2: on market price. Right now, I take I want to
Speaker 2: take a loan of one hundred and fifty thousand, which
Speaker 2: would be an approximate to fifty percent. And because the
Speaker 2: loan is open ended, I don't have to make monthly payments.
Speaker 2: I just have to repay it at some point. But
Speaker 2: let's say that I wait five years and it's twenty
Speaker 2: thirty and bigcoin shoot shoots up to five hundred thousand dollars.
Speaker 2: What happens in that scenario? Can I liquidate some of
Speaker 2: the bitcoin or repaid the loan? Like, can I do
Speaker 2: things like that? Yes?
Speaker 1: Absolutely, so you can repay the loan at any time.
Speaker 1: Let's say, in the process of bitcoin rallying and increasing
Speaker 1: in value, your loan to value will naturally be decreasing, right,
Speaker 1: So technically, like if you did nothing, the health of
Speaker 1: your loan in terms of just asset coverage, would just
Speaker 1: be getting healthier and healthier, right, And at any point
Speaker 1: in time, Let's just say, let's just say you had
Speaker 1: USDC in your account and you wanted to pay down
Speaker 1: the loan, You could do that. Let's just say you
Speaker 1: wanted to basically use some of the bitcoin collateral to
Speaker 1: pay down. We offer you the capability of withdrawing collateral
Speaker 1: from your loan because let's say now your loan to
Speaker 1: value is so low, right, you're feeling really good about
Speaker 1: the health of your loan. You can withdraw some of
Speaker 1: that bitcoin, and then you could decide to sell some
Speaker 1: of it use those proceeds to pay down the loan.
Speaker 1: So what you mentioned is entirely possible with the product
Speaker 1: suite that we're offering today.
Speaker 2: Wow, and who dumb question? Who are the lenders here
Speaker 2: and how are they able to do? The open ended term?
Speaker 1: Yeah, so the borrowing activity happens through our integration with Morpho,
Speaker 1: So happens entirely on chain where coin Base is allowing
Speaker 1: our users to access these really valuable on chain capabilities,
Speaker 1: and essentially on chain, you know, there are Morpho vaults
Speaker 1: and markets where you know, there is a facilitation of
Speaker 1: borrowing and lending activity, right, So I guess we'll get
Speaker 1: to at some point. But like there are platforms that
Speaker 1: you know allow users to lend USDC, you know, including
Speaker 1: coin Base, right, and those funds go towards facilitating also
Speaker 1: the borrowing needs, right, but not in like a one
Speaker 1: to one direct fashion, but all through the on chain
Speaker 1: capabilities that you know Morpho provide.
Speaker 2: Is it like a application running on base?
Speaker 1: Morpho is on Base, Morpho is also on Ethereum and
Speaker 1: other chains. Though, DeFi borrow and DeFi lend on coinbase
Speaker 1: or on Morpho on base?
Speaker 2: Got it? Okay? Very cool? I love that and the
Speaker 2: open ending endedness of it. Makes it unique because if
Speaker 2: you are planning to be a long term holder of
Speaker 2: bitcoiners another crypto asset, it just gives you the long
Speaker 2: term horizon. And if we have the thesis that all
Speaker 2: of this is going to continue to go up due
Speaker 2: to different factors, this is a better way almost than
Speaker 2: going to sell and you know, incurring capital gains, taxes
Speaker 2: and much more.
Speaker 1: Yeah, I think a lot of users are finding it
Speaker 1: that way. And of course in the end, I feel
Speaker 1: like it's all about the configuration and optionality you provide
Speaker 1: to users, right, some people do like that open endedness.
Speaker 1: There are other users who you know, have a fixed
Speaker 1: borrowing need in mind. So I think as this space
Speaker 1: ultimately expands, there will be different configurations and optionality that
Speaker 1: users increasingly have to serve their everyday borrowing and liquidity
Speaker 1: it needs.
Speaker 2: Oh for sure. And what about expansion to other assets?
Speaker 2: So you know, folks hold bitcoin, Salona, XRP, whatever it else, Right,
Speaker 2: are you planning to add these expand to other assets?
Speaker 1: So from the outset when we announced and launched this product,
Speaker 1: I think we stated that you know, we ultimately want
Speaker 1: to maximally serve the borrowing and liquidity customer. Job so
Speaker 1: you can expect that we're thinking about how to do that,
Speaker 1: and expansion to other assets is of course like part
Speaker 1: of the equation. So won't comment too much on our
Speaker 1: exact plans. But ultimately, I think if you want to
Speaker 1: serve people maximally on liquidity and borrowing, you know, you
Speaker 1: want to serve them across you know, where they're at,
Speaker 1: the different assets that they might hold.
Speaker 2: You may not be able to answer this question, but
Speaker 2: you know, as you were talking about we were talking
Speaker 2: about the home example of someone buying a house, does
Speaker 2: it make sense for a coinbase to explore mortgages given
Speaker 2: that you know you're doing this type of lending, maybe
Speaker 2: you're able to offer or maybe not just the loans itself.
Speaker 2: It's fine, I don't know, but maybe some sort of
Speaker 2: mortgage product. I don't know.
Speaker 1: Yeah, I also won't comment too much though, once again,
Speaker 1: I do think that it's under the same customer job,
Speaker 1: right and for the same reasons. You know, a user
Speaker 1: ultimately has a purchasing need, and you know a mortgage
Speaker 1: is a form of that. So I would say today
Speaker 1: we're really focused on, you know, sort of like the
Speaker 1: goodness we have with the DEEPI borrow product, and there's
Speaker 1: you know, a million different ways we can take this,
Speaker 1: and if I take a step back, we're ultimately thinking
Speaker 1: about our users' financial lives and how we can bring
Speaker 1: financial services on chain serve them extremely well, you know,
Speaker 1: across the very the various facets of that.
Speaker 2: Right.
Speaker 1: So I don't know if you if you kind of
Speaker 1: extend the timeline long enough, there's like little that we
Speaker 1: wouldn't consider doing. But once again, I'll kind of just
Speaker 1: keep it more general as it pertains to our new
Speaker 1: term clients.
Speaker 2: Oh for sure. Yeah, I mean I love the product.
Speaker 2: I think that this is such a great idea, and
Speaker 2: I've spoken to some other folks at Coinbase at the
Speaker 2: coin Base summit. You know, I'm looking to do this.
Speaker 2: I was waiting to see how the price a bitcoin
Speaker 2: would move, but I think it's something I'm well, I
Speaker 2: should say, I discussed with my wife. I haven't pulled
Speaker 2: the trigger yet because you know, we're just trying to
Speaker 2: decide certain plans as far as home home momp grades
Speaker 2: or buying a larger home or things like that. But
Speaker 2: this is a great option because man, I hate taxes
Speaker 2: and I would hate to have to give up my
Speaker 2: bitcoin in current taxes versus I can hold on to
Speaker 2: it and get a long term alone like this to
Speaker 2: do what I need to do.
Speaker 1: Yep, and smart move to get that approval before you
Speaker 1: make the decision. But yes, I agree with you. And
Speaker 1: then once again, like I think a user would be
Speaker 1: thinking about the various alternatives they have, right, Like, you know,
Speaker 1: folks are smart, They'll think about the cost of borrowing.
Speaker 1: And we do believe that, you know, bitcoin back loans
Speaker 1: are a really attractive way to to get that necessary liquidity,
Speaker 1: particularly if you're already holding bitcoin as you are.
Speaker 2: Talk to us a bit about security and even is
Speaker 2: there insurance you know, well, let's say something. I'm not
Speaker 2: saying something will, but in the event that something may
Speaker 2: have failed or it gets broken just temporarily, what happens
Speaker 2: to the user's collateral?
Speaker 1: Yeah, so there there is no insurance program. And Coinbase
Speaker 1: is ultimately you know, helping facilitate users accessing this really
Speaker 1: valuable capability do the integration with Morpho from the ease
Speaker 1: of the Coinbase app. So yeah, like you know, users
Speaker 1: should of course like make their do their own research
Speaker 1: and make that responsible decision on their end, you know,
Speaker 1: of course, like Morpho on their end. They also have
Speaker 1: their own security practices, et cetera. So there's a lot
Speaker 1: of information you know, both online. I think something we
Speaker 1: also serve up an app that users can of course
Speaker 1: use to educate themselves.
Speaker 2: Got it. I wanted to ask about some other big
Speaker 2: news around Coinbase, and most recently was the announcement of
Speaker 2: the Samsung partner ship, which is huge. Tell us about that,
Speaker 2: and you know, what's the vision here?
Speaker 1: So we ultimately want to you know, allow users to
Speaker 1: as many people in the world really to use crypto
Speaker 1: to further their financial lives. And you know, through that,
Speaker 1: one of the strategies is to partner with platforms to
Speaker 1: distribute Coinbase and the various services that we offer. So
Speaker 1: in the case of Samsung, we're offering seventy five million
Speaker 1: plus Samsung Galaxy users in the US free access to
Speaker 1: our membership program Coinbase one to bring them on board.
Speaker 1: And you know, through that partnership, we'll also bring crypto
Speaker 1: access to a lot of people where they already are
Speaker 1: right through the device that they use every day and
Speaker 1: Coinbase one. Just because like I'm not sure if everyone
Speaker 1: knows what that is. It's basically our membership program that
Speaker 1: provides a suite of benefits, right, zero trading fees, you know,
Speaker 1: boosted USDC reward rates, boosted staking rates. We've also rolled
Speaker 1: out the coin Base one one card recently that allows
Speaker 1: you to earn up to four percent back in bitcoin
Speaker 1: on your everyday spend. There's account protection, so there's more
Speaker 1: features actually at this point than I can really kind
Speaker 1: of like name in a concise way. But I think
Speaker 1: the whole point is to not only introduce people to crypto,
Speaker 1: but also introduce them to a membership that maximizes the
Speaker 1: way that they can use crypto in their everyday lives
Speaker 1: as well as grow their money right and their their assets.
Speaker 1: And so you know, with Samsung, they are going to
Speaker 1: be distributing this membership, providing you know, Samsung users with
Speaker 1: the ability to quickly come on board and then also
Speaker 1: get the best of what coin base offers.
Speaker 2: That's really great. It's such a such a huge on ramp.
Speaker 2: I am a coin Base one used subscriber, if you
Speaker 2: want to call it that, and I do have a
Speaker 2: Samsung phone. I'm on the Android side, so looking forward
Speaker 2: to testing out that integration. That's really great. And I know, Ben,
Speaker 2: you probably can't answer this but I'm assuming you're going
Speaker 2: to be knocking on Apple's door to do this as
Speaker 2: well with them.
Speaker 1: No comment on that coin Based one member. Hopefully you've
Speaker 1: gotten the coin based one card. If not, you should
Speaker 1: also order that.
Speaker 2: Yeah, I need to order that. I've been so busy
Speaker 2: that I haven't even like got a chance to think.
Speaker 2: I knew, I know of it, right, and I saw
Speaker 2: the announcement and everything. But I think I'm gonna try
Speaker 2: to do that this quarter as things settle down a bit.
Speaker 2: I'm not traveling as much. And then there was also
Speaker 2: some really great news about Staking in New York. I
Speaker 2: know there's a lot of people in New York who
Speaker 2: have been frustrated with not having access to certain services
Speaker 2: across the board, right, not just Coinbase, but I tried
Speaker 2: to remind people like, there's this thing called the bit
Speaker 2: license unfortunately, and much more in a very strict NYDFS
Speaker 2: tell us about the launch of staking for different assets there.
Speaker 1: Yeah, so obviously, you know, we have a ton of
Speaker 1: valued users in New York. And before we even get
Speaker 1: the staking, Coinbase one card is also now available in
Speaker 1: New York, so we're very much pushing into just like
Speaker 1: allowing our users in New York to access all of
Speaker 1: the tools that we provide to further their their every
Speaker 1: day financial life. So staking is obviously a huge win
Speaker 1: for consumers in New York and just economic freedom more generally.
Speaker 1: So staking empowers our users to unlock financial freedom by
Speaker 1: part partaking in the crypto economy earning rewards on their
Speaker 1: stakable crypto assets. Right, so New Yorkers can now essentially
Speaker 1: sign up for coinbase if they don't already have it,
Speaker 1: or if they do, they can have their assets staked,
Speaker 1: you know, within seconds. Right, just go into the coin
Speaker 1: based experience. You can steak Eating and steak Solona, a
Speaker 1: host of other assets. And we applaud New York for
Speaker 1: embracing the future of finance and supporting economic opportunities for citizens.
Speaker 1: And I think there's an example, This is an example
Speaker 1: that a lot of other states that don't currently allow
Speaker 1: steaking can hopefully also follow so that they where users
Speaker 1: can also once again maximize their optionality and how they
Speaker 1: want to manage and grow their finances.
Speaker 2: Yeah, that's such a great thing. And I love the
Speaker 2: staking aspects of some of these blockchains proof mistake and
Speaker 2: being able to earn these passive rewards right for being
Speaker 2: a participant on the network, and like to your point,
Speaker 2: hopefully other states follow and then this has opened up
Speaker 2: to more people as it should be. Yeah. Absolutely, Now
Speaker 2: you guys are doing a lot obviously, what else is
Speaker 2: on your roadmap that you can share? So, I mean,
Speaker 2: if you've been following coinbase, you will hear that. You
Speaker 2: will have heard that we're working on delivering that everything exchange,
Speaker 2: so being the place where users can trade and invest
Speaker 2: in all assets, right, whether that's you know, across crypto,
Speaker 2: across decks assets which we recently rolled out to all
Speaker 2: of our users, you know, and as well as the
Speaker 2: cross equities, prediction markets and a host of others. So
Speaker 2: that is definitely one theme where the company is pushing
Speaker 2: forward on, you know, just really giving our users maximum
Speaker 2: access to all the ways that they can in their
Speaker 2: everyday lives, you know, trade, invest and grow their money.
Speaker 1: That's one theme. And then if you take a step back,
Speaker 1: one big focus of ours is really to just help
Speaker 1: people grow their money, you know, in the best way
Speaker 1: that they can. So in addition to trading trading a
Speaker 1: host of assets, once we've rolled out a number of
Speaker 1: those features, you know, you can stake right you can
Speaker 1: hold USDC and earn rewards. And then we obviously rolled
Speaker 1: out DeFi lend, where a user can I think currently
Speaker 1: at the moment you can earn about eight and a
Speaker 1: half percent on your USDC by similar lending it to
Speaker 1: on chain, right, and then outside of that, I would say,
Speaker 1: you know, the Coinbase one card. It is a mechanism
Speaker 1: for us to start serving your everyday relationship, right whether
Speaker 1: you're out buying groceries, you're hopping on the subway, or
Speaker 1: anything else. So I think there's one big theme around
Speaker 1: helping your users grow their money across trading, investing, and
Speaker 1: even just deploying their ass sets and even spending right
Speaker 1: in their everyday lives. And then outside of that, you know,
Speaker 1: we rolled out the pay tab that allows people to
Speaker 1: send money instantly and for free, you know, anywhere in
Speaker 1: the world, and they can send USDC, they can send
Speaker 1: crypto assets, so you can see this this also this
Speaker 1: host of sort of like different uses of money in
Speaker 1: one's everyday life that are starting to emerge, right, and
Speaker 1: DeFi borrow is obviously sort of at the intersection of
Speaker 1: that where you may have traded or bought bitcoin or
Speaker 1: you know, and then you want to get liquidity from it, right,
Speaker 1: that liquidity, that money maybe you know, you use it
Speaker 1: directly on Coinbase, right, or maybe some people you know
Speaker 1: withdraw that money to you know, another institution and conduct
Speaker 1: their needs there. So yeah, I would say those are
Speaker 1: some of the themes of things that we are working on.
Speaker 1: And and Coinbase one obviously is a super charger across
Speaker 1: all of that.
Speaker 2: Oh absolutely. And you know, I love Coinbase's mission to
Speaker 2: create a super app and you know, kind of all
Speaker 2: in one where you have all these features and like
Speaker 2: you said, like helping people to grow their wealth and
Speaker 2: do their finances and so forth. And from one point
Speaker 2: of view, you know, I see it as just a
Speaker 2: great disruption of the existing banking setup and being able
Speaker 2: to offer people more in a more decentralized way and
Speaker 2: not the traditional model where they give you like next
Speaker 2: to nothing in your checking and savings account and you
Speaker 2: can put your money to work. Right, It's more free,
Speaker 2: more accessible. So I love that mission, and it seems
Speaker 2: like the puck is heading that direction. Everybody's trying on
Speaker 2: that same path, trying to disrupt the traditional finance world.
Speaker 1: Yeah, I mean, much more to come on this front,
Speaker 1: and ultimately We don't really think about being a quote
Speaker 1: unquote super app just for the sake of it. I
Speaker 1: think the ultimate goal is really to just serve different
Speaker 1: customer jobs in a really great and differentiated way. Right.
Speaker 1: If you do that across enough things, then yes, a
Speaker 1: user might be using you for multiple things in their
Speaker 1: financial life, right, and you know, and thereby you may
Speaker 1: be a quote quote super app in their eyes. But
Speaker 1: I think that's quite different from you know, a lot
Speaker 1: of you know a lot of attempts where you see
Speaker 1: people just want to be a super app or a
Speaker 1: certain business model, right you call it a neobank or
Speaker 1: whatever else, just for the sake of it, and you
Speaker 1: kind of just want to roll out the sort of
Speaker 1: you know, sort of copy and paste suite of features
Speaker 1: in order to accomplish that goal, which is a little
Speaker 1: backwards from my perspective.
Speaker 2: Yeah, for sure, you know, what are your thoughts on
Speaker 2: how and you worked at some of the tradify companies,
Speaker 2: but all of them now coming in banks capitulating obviously
Speaker 2: you got Blackrock Fidelity, all these folks. Black Rock works
Speaker 2: with Coinbase, of course, but just recently, I mean even
Speaker 2: Today's City Bank announced they're going to launch crypto custody
Speaker 2: next year, and it's just amazing what's happening. They're all
Speaker 2: the institutional herd just coming in today's asset class.
Speaker 1: I think a lot of people are just recognizing that
Speaker 1: crypto and on chain economy is a really you know,
Speaker 1: emergent and powerful way to serve their users, right and
Speaker 1: by virtue of that, you know, a lot of them
Speaker 1: are thinking about how they can use crypto to you know,
Speaker 1: further the services they provide and in many cases partnering
Speaker 1: with Coinbase as you mentioned, right, Like we partner with
Speaker 1: the black rocks of the world with a lot of
Speaker 1: different institutions. So yeah, Like I think, as I mentioned
Speaker 1: at the start of this call, there's definitely a bit
Speaker 1: of a convergence of sort of like financial services or
Speaker 1: what used to be sort of deemed as tradify or
Speaker 1: like traditional non crypto fintech, as well as as well
Speaker 1: as say the crypto space, right, and a lot of
Speaker 1: people are recognizing that ultimately cryptos for all the tools
Speaker 1: are powerful and within it of course, like you know,
Speaker 1: Coinbase wants to build you know, the best and most
Speaker 1: cohesive services for our users while also partnering and empowering
Speaker 1: other platforms to do the same.
Speaker 2: And on that note, we've seen a lot of digital
Speaker 2: acid treasury companies on the rise, buying crypto assets putting
Speaker 2: on their balance sheet. You know, Michael Sailors Strategy started
Speaker 2: his whole trend. What are your thoughts on that and
Speaker 2: are some of these folks working with coin bates to
Speaker 2: like buy the assets, custody the assets and so forth.
Speaker 1: Yeah, So separate from just like dedicated digital asset treasury companies, right,
Speaker 1: there are certainly just a lot of corporations that are
Speaker 1: increasingly looking for ways to deploy capital more effectively without
Speaker 1: sacrificing speed, security or market access. Right. So, you know,
Speaker 1: we're seeing also corporate treasuries are under pressure to hedge
Speaker 1: against inflation or generate yield on their treasury assets, right.
Speaker 1: You know, coinbase is definitely empowering that and partnering with
Speaker 1: a lot of platforms that are looking to use crypto
Speaker 1: more in their everyday sort of like company functions. And
Speaker 1: you know, of course within that there's also let's say,
Speaker 1: the strategies of the world and actually more pure played
Speaker 1: digital asset treasury companies. But I just want to call
Speaker 1: out that it's actually much more broad than that if
Speaker 1: you look at, you know, the various companies that are
Speaker 1: starting to think about where the role crypto might play
Speaker 1: in their overall treasury management and allocation.
Speaker 2: Yeah, it's just interesting to see all these folks getting
Speaker 2: involved in crypto. It's fascinating. I'm excited for the future,
Speaker 2: especially as you know, we get even more clarity in
Speaker 2: the market from the government around crypto legislation and much more.
Speaker 2: What are your thoughts on the tokenization market. A lot
Speaker 2: of these firms looking to put a lot of different
Speaker 2: things on the blockchain, whether it be stocks, gold, and
Speaker 2: other assets.
Speaker 1: I think ultimately, the on chain economy is one that
Speaker 1: people are viewing as increasingly powerful, and by tokenizing different
Speaker 1: assets you have access to it, right, you can start
Speaker 1: to empower different things, you know, borrowing, lending in different
Speaker 1: use cases. So, you know, coinbase ultimately will be continuing
Speaker 1: to push on this front, you know, whether that's tokenized equities,
Speaker 1: real world assets, derivatives, prediction markets, et cetera. We are
Speaker 1: working towards a cryptonative launch of tokenized equities as part
Speaker 1: of our broader strategy, and we think the total addressable
Speaker 1: market for you know, equities as well as obviously just
Speaker 1: tokenized assets is huge, right, so we're seeing the tip
Speaker 1: of iceberg on it. We aremitted to being on the
Speaker 1: frontier of it and doing it the right way with
Speaker 1: deep tech, you know, the right regulatory investments, etc. And
Speaker 1: you know, on chain borrowing and lending our examples of
Speaker 1: that right while you know what you've seen borrowing against
Speaker 1: bitcoin is collateral as well as lending out USDC to
Speaker 1: earn enhanced rewards. Those are a couple examples where you
Speaker 1: know assets have been tokenized and sort of like facilitating
Speaker 1: different use cases and debts trading, which we've rolled out
Speaker 1: to all our users as of this month. But that's
Speaker 1: another example where you know, people are getting access to
Speaker 1: a ton more assets for their everyday trading and investing needs.
Speaker 1: So we're really excited to see how the DeFi mullet
Speaker 1: as we call it, can expand our product suite and
Speaker 1: really turn coinbase into the premier financial services platform for
Speaker 1: everyday use and I think tokenization plays a meaningful role
Speaker 1: in that overall picture.
Speaker 2: Yeah, it would just open up so many new opportunities
Speaker 2: for these traditional assets. And you know, we started the
Speaker 2: conversation talking about crypto back loans that maybe eventually I
Speaker 2: think you hinted to it that if I have a
Speaker 2: lot of tokenized assets and you, depending on what they are,
Speaker 2: they could be put to work where I can borrow
Speaker 2: against them and things like that. Right, Yep, absolutely awesome, Ben,
Speaker 2: great stuff. I got some wrap up questions here for you. First,
Speaker 2: if you could create your own metaverse, what would the
Speaker 2: theme be?
Speaker 1: Oh?
Speaker 2: Interesting?
Speaker 1: Yeah, I was part of the cohort that actually played
Speaker 1: around Second Life back in the day. Felt like that
Speaker 1: was like a metaverse before some of the metaverse hype.
Speaker 1: I guess there's a lot of craziness across all kinds
Speaker 1: of metaverses. If I think about it, I would love
Speaker 1: something that's quite calming and therapeutic, right, maybe the use
Speaker 1: of like certain modalities for like whether it's vr AR,
Speaker 1: some type of metaverse where you actually go to like
Speaker 1: you know, enjoy like just like relaxing sort of like
Speaker 1: a sensory like spa like head of environment. I don't know,
Speaker 1: I'm kind of just thinking off top, but that's something
Speaker 1: that I think could actually quite interesting in addition to
Speaker 1: all of the meta verses where you like create, create, create,
Speaker 1: and you like, you know, have this like sensory overload.
Speaker 2: Yeah, I'm with you because recently I've been on a
Speaker 2: meditation journey where trying to meditate more, especially like you know,
Speaker 2: having a busy day and interviewing people and talking all
Speaker 2: day and just like being able to get quiet time meditate,
Speaker 2: but like having a metaverse where I can immerse myself
Speaker 2: in that that would be great. So I'm with you.
Speaker 1: Yeah, a calm or one of those platforms should probably
Speaker 1: build that.
Speaker 2: Yeah, for sure. Rapid fire questions. Favorite food I see
Speaker 2: sushi is probably up there in Japanese food generally. Favorite
Speaker 2: musician or band Red Hot Schilip Peppers. Favorite movie Memento
Speaker 2: by Chris Nolan. I remember that. That's That's one of
Speaker 2: those movies you can't really forget.
Speaker 1: Favorite book nineteen eighty four Georgia orwell maybe Animal Farm
Speaker 1: quite I like the George or Well books.
Speaker 2: And when you're not working at coinbase, what are you
Speaker 2: doing for fun?
Speaker 1: I love to just find like water out in nature,
Speaker 1: So it could be a water hole, could be the beach.
Speaker 1: Obviously here in Norcall, we'll just drive up to Bodega Bay,
Speaker 1: or let's just Sonoma Coast with the family and just
Speaker 1: enjoy a day out in the sun and kind of
Speaker 1: like the kind of wild coast of that, or maybe
Speaker 1: drive even further up to let's say, see Ranch or Mendocino.
Speaker 1: So yeah, that's sort of been the theme of my
Speaker 1: summer and whether that's there or you know, Tahoe or
Speaker 1: wherever else.
Speaker 2: Very cool, Ben, Thank you so much for your time.
Speaker 2: I love what coinbase is doing, love the products, and
Speaker 2: you know, maybe we'll have to have you back on
Speaker 2: as you guys launched some cool new things and we'll
Speaker 2: talk about it. But thank you so much for joining me.
Speaker 2: Great to be here.
Speaker 1: Thanks Teddy,