Coinbase CEO Brian Armstrong said on a recent episode of the Bankless podcast that cryptocurrencies are key to updating the current financial system. , said the laws and norms are decades old.
“The financial system needs to be updated. It’s slow, it’s old-fashioned. The code is 40 years old, just like the law is 100 years old,” Armstrong said.
He added that despite the recent setbacks by FTX and Silvergate, widespread confidence in cryptocurrencies is at an all-time high.
“We believe that cryptocurrencies can update the financial system. […] All of these regulatory challenges will be fine if we elect democratic representatives who believe in our values of economic freedom,” Armstrong predicted.
Coinbase and staking changes
Regarding some recent changes to Coinbase, Anderson said he was happy to defend the staking mechanism in court. “Coinbase’s staking program is not a security, so I have no problem defending it in any way necessary,” Armstrong told the podcast.
latest coinbase announced The staking service has been updated a month after US regulators targeted similar products. In an email to users, the cryptocurrency exchange clarified that staking will continue, highlighting that rewards will be earned through the protocol and not directly from Coinbase. This distinction is essential for US regulators such as the SEC, which have expressed concerns about the potential for such services to be classified as securities. This update includes changes to how staked assets are transferred and sold.
He added that Coinbase is also looking at some derivative options. “We have been working with the CFTC here to get the derivatives platform up and running,” he said. will be,” he said of Coinbase’s decision to offer a derivatives product.
Regarding the current regulated market and the wider contagion spreading across the industry, Anderson said on the Bankless podcast that he believes risk can be mitigated through proper controls, which centralized exchanges are particularly good at. .
“I think this kind of contagion could be mitigated considerably by rational risk management,” said Anderson.
But Anderson added that he expects regulators to use stablecoins as proxies to argue that liquidity problems in stablecoins threaten the traditional financial system.
“They are most concerned about massive withdrawals from stablecoin banks, creating liquidity problems in the traditional financial system.”
He said this threatens the cultural ecosystem of cryptocurrencies in the United States.
“Nowadays, many crypto entrepreneurs say they need to set up companies offshore in countries other than the US because the environment is too dangerous in the US. No, it’s pretty dangerous.”
Like other cryptocurrency entrepreneurs, he singled out other jurisdictions that are likely to pick up the slack in the event of overregulation in the US, including the UK, United Arab Emirates, Singapore and South Korea.
You can watch the full Bankless podcast episode here.