00:00Carol, what is Coinbase's response reaction to the text of the market structure bill that was released by the Senate
00:05Banking Committee overnight?
00:07Do you support it? Well, thank you, Scarlett. We are very excited about the legislative text coming out last night.
00:13We're still digesting it. It's hundreds of pages. It's nine titles. There are a lot of diverse new provisions.
00:19But I think at the end of the day, it is very consistent with what we've seen in the past
00:23with some really important material changes.
00:25We identified back in January four different areas that we thought really needed to be improved really before it could
00:32go and be ready for prime time.
00:33And all four of those have been addressed. That includes rewards issues, which I'm happy to talk about.
00:38Also, DeFi protections and developer protections. Third, making sure that we can take tokenized equities to market.
00:45That's a really new part of tokenizing our capital markets. And then finally, making sure that the SEC and CFTC
00:51authority is right-sized
00:53and we have the ability to issue these new, exciting assets in the United States.
00:57So going back to earlier this year in January, Coinbase killed the Clarity Act markup by pulling support over stablecoin
01:02yield restrictions.
01:03Four months later, Brian Armstrong tweets, mark it up. What did Coinbase actually win in that negotiation?
01:10Was a four-month delay worth it?
01:13I think the delay would have happened with or without the markup.
01:16It would have had to happen before the markup or after the markup because there were really important material changes
01:22that needed to happen.
01:22So I think ultimately the process played itself out and the provisions that have now been improved, I think, actually
01:29streamline this process.
01:30It will make us more competitive globally. It will allow developers and issuers to continue to develop and really innovate
01:37here in the United States.
01:39So the four-month process, I think, played out. And ultimately, we are right where we would have been,
01:44which is, I think, teeing up for floor debate hopefully in the next month or two.
01:48So, Carol, what did Coinbase actually lose then? I mean, there was momentum that was lost in that waiting the
01:53four months,
01:54but what else was sacrificed in waiting this out?
01:57I think the most important thing that happened, and there were, again, several areas that we were focused on,
02:02but the rewards issue was a really critical part of the future of stablecoin scaling and adoption in the United
02:08States.
02:08That was the goal of the Genius Act. And we felt like the number one North Star that we needed
02:13to accomplish was to protect rewards for everyday Americans
02:16and to really protect the intent of the Genius Act. And the compromise that came out from Senators Tillis and
02:22also Brooks,
02:24is that how we would have written it? Absolutely not.
02:26Is that what we are willing to accept in a world where clarity for the entire industry is really the
02:33next step here?
02:34So, I think the proposal is truly a compromise. The banks received everything they asked for, just shy of completely
02:42banning rewards for all Americans.
02:44So, when we think about what is a metric of success, a metric of success is making sure that stablecoins
02:50remain competitive globally,
02:52making sure that everyday Americans can earn rewards so they actually want to switch and they want to use these
02:57better, faster, cheaper methods of payment.
02:59So, that, I think, is a really key win, not just for crypto and not just for the banks, because
03:04I do think it is a win when we think about the opportunities.
03:07But it's really a win for all the everyday Americans who want to use stablecoins.
03:12Let's push this forward to the midterms. We're just months away from midterm elections.
03:17And I'm curious what Coinbase is doing ahead of those midterms, where it's spending money, who you're supporting.
03:23How are you thinking about them? Well, the midterms are looming large right now.
03:28I think they're particularly looming large when you think about the 3.7 million Americans who have signed up for
03:33Stand With Crypto.
03:34That's the grassroots advocacy organization that really spans the entire country.
03:40And those are crypto voters. They are watching. They care deeply about this legislation.
03:45And I think that that is something you don't see very often from grassroots communities on an issue.
03:51This is something that they view as part of their economic well-being, some of their wealth generation, generational wealth
03:56building.
03:57It's really important to our crypto advocates that this bill passes.
04:01So, I think that they will be looking at what happens on Thursday.
04:05I think that they will be looking at what happens on the floor.
04:07This is the most bipartisan bill that has ever been written and taken to a markup.
04:11And I think that they are going to be looking to their lawmakers to support it.
04:15You know, I think about the midterm elections and I think about how Coinbase has been such a big player
04:20in elections overall.
04:22Outspending any other crypto company on lobbying and political contributions,
04:25Brian Armstrong has a direct line to the White House. That's clear.
04:28You have a former Coinbase executive running Stand With Crypto.
04:31At what point does Coinbase's policy influence become a competitive moat rather than an industry-wide effort?
04:39And is that good for the crypto ecosystem?
04:43This, I think, Scarlett, has been the most united we've ever seen the crypto industry.
04:47And that is saying something because this is a very diverse industry from the smallest of your decentralized finance protocol
04:53developers up to Coinbase,
04:55where we are obviously the largest publicly traded company in the United States for crypto.
04:59And there is absolutely a united front on trying to get this legislation passed.
05:04That, I think, has been really key to its success.
05:07This isn't about any one company. Certainly, Coinbase has been here.
05:11We've also been here the longest. I started working for Coinbase back in 2016.
05:15This didn't happen overnight and it didn't happen with any one political strategy.
05:19It really is something that has developed over a decade.
05:21And the united industry is what I think is going to help push it across the finish line.
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