POLITICAL FLASHPOINT: Crypto bill IGNITES Trump conflict showdown

[0:00] MEANWHILE, THERE'S THIS, [0:01] CRYPTO IS IN THE CROSSHAIRS. [0:03] THE SENATE BANKING COMMITTEE [0:04] FINALLY MOVING FORWARD WITH THE [0:05] HOUSE PASS CLARITY ACT. [0:07] A MARKUP VOTE SCHEDULED TOMORROW [0:08] FOR THE CRYPTO FRAMEWORK [0:09] LEGISLATION. [0:10] THE CHAIRMAN OF THE COMMITTEE, [0:12] TIM SCOTT, SPEAKING WITH ME ABOUT [0:13] IT LAST MONTH. [0:14] WATCH. [0:15] THIS IS THE BEST TIME OF THE [0:18] GAME. [0:18] IT'S GOING REALLY WELL. [0:19] AND THEY WILL GET THIS THING TO [0:21] THE FLOOR OF THE SENATE JUNE OR [0:22] JULY. [0:23] AND HOPEFULLY THAT MEANS THE [0:25] AVERAGE PERSON IN THE COUNTRY [0:26] WILL BE ABLE TO KEEP MORE OF [0:28] THEIR MONEY IN THEIR POCKET [0:33] BECAUSE THE SPEED OF COMMERCE [0:35] WILL GET FASTER, BETTER, AND EVEN [0:37] LESS EXPENSIVE. [0:38] THIS IS REALLY GOOD NEWS FOR [0:39] SINGLE MOMS LIKE THE ONE THAT [0:41] RAISED ME BECAUSE PRESIDENT [0:42] TRUMP SAID IT BEST, AMERICA WILL [0:44] BE THE CRYPTO CAPITAL OF THE [0:46] WORLD. [0:46] DEMOCRATIZATION COMING YOUR WAY. [0:48] AND THE COMMITTEE [0:50] REVEALING THE FINAL LANGUAGE OF [0:51] THE BILL THIS WEEK WHICH [0:53] INCLUDED KEY COMPROMISES [0:54] NEGOTIATED BY LAWMAKERS WITH [0:55] THE BANKS AND CRYPTO LEADERS [0:57] OF THE STABLE COIN REWARDS AND [0:59] PROTECTIONS FOR SOFTWARE [1:00] DEVELOPERS. [1:00] I SPOKE WITH THE CEO OF [1:02] COINBASE, BRIAN ARMSTRONG, LATE [1:03] YESTERDAY ON WHETHER THOSE [1:05] ISSUES HAVE BEEN RESOLVED. [1:06] WATCH. [1:06] WELL, THERE'S BEEN A [1:09] COMPROMISE. [1:10] AND SO YOU KNOW IT'S A TRUE [1:11] COMPROMISE BECAUSE BOTH SIDES [1:12] LEFT A LITTLE BIT UNHAPPY. [1:13] AND SO ON THIS STABLE COIN [1:15] REWARDS ISSUE IN PARTICULAR, WE [1:17] MET THE ASKS OF THE BANK LOBBY [1:19] AND THE SENATE AND THEY SAID [1:21] THEY DON'T WANT TO HAVE ANY [1:22] REWARDS PAID ON IDLE BALANCES. [1:24] AND SO WE CAME UP WITH THIS [1:26] COMPROMISE OR CONCESSION THAT [1:28] REWARDS COULD BE PAID AS LONG AS [1:30] THERE WAS SOME SORT OF [1:31] MATERIAL ACTIVITY ON THE [1:32] ACCOUNT LIKE A PAYMENT OR A [1:33] TRADE THAT HAD TAKEN PLACE. [1:34] I'VE GOT TO GIVE A LOT OF [1:35] CREDIT TO SENATORS ALSO [1:36] BROOKS AND TILLIS AND THEIR [1:37] STAFF WHO WORKED TIRELESSLY ON [1:38] THIS TO BRING BOTH SIDES [1:39] TOGETHER AND REACH THIS [1:40] COMPROMISE. [1:41] I THINK IT'S IN THE BEST PLACE [1:43] THAT WE'VE SEEN SO FAR AND THE [1:44] OTHER ISSUES THAT I BROUGHT UP [1:46] IN JANUARY HAVE ALSO BEEN [1:47] RESOLVED AND SO AT THIS POINT [1:48] WE'RE READY TO SUPPORT A [1:49] MARKUP LATER THIS WEEK. [1:50] SO YOU'RE EXPECTING THE [1:52] MARKUP THURSDAY? [1:53] THAT'S CORRECT. [1:54] AND BRIAN, I WANT TO GET YOUR [1:56] TAKE ON THIS BECAUSE THERE ARE [1:59] OTHER OBSTACLES HERE AND I [2:01] WONDER WHAT THE SENATE [2:03] AGRICULTURAL COMMITTEE HAS TO [2:05] SAY ABOUT ALL OF THIS. [2:07] THEY'LL WEIGH IN AS WELL, [2:08] CORRECT? [2:09] THAT'S CORRECT. [2:10] THERE'S A ROLE HERE FOR BOTH [2:13] SENATE BANKING AND SENATE AG. [2:14] SENATE AG ALREADY HAD THEIR [2:16] MARKUP EARLIER THIS YEAR AND IT [2:18] DID PASS. [2:19] NOW, IF THE SENATE BANKING [2:21] COMMITTEE GOES THROUGH LATER [2:22] THIS WEEK, THEN IT GOES TO THE [2:24] FULL SENATE FLOOR AND THAT'S [2:25] WHAT WE'RE HOPING TO HAVE [2:26] HAPPEN IN THE COMING MONTHS [2:27] JUST AS YOU SAW TIM SCOTT [2:29] MENTION EARLIER ON YOUR [2:30] PROGRAM. [2:31] AND YOU'VE SAID ON THE CALL [2:34] AFTER YOU REPORTED YOUR [2:36] RESULTS FOR THE FIRST QUARTER [2:37] YOUR FIRST QUARTER THAT THIS IS [2:39] AN OPPORTUNITY TO HELP [2:41] INSTITUTIONS ONBOARD ONTO THE [2:42] COINBASE ECOSYSTEMS. [2:43] TELL US WHAT THAT MEANS. [2:44] WHAT ARE YOU EXPECTING IN [2:45] TERMS OF OTHER INSTITUTIONS [2:46] WANTING TO ONBOARD? [2:47] YEAH. [2:48] WELL, YOU KNOW, I GO AROUND AND [2:49] I SPEAK WITH LOTS OF DIFFERENT [2:50] BANK CEOs AND MANY OF THEM ARE [2:51] JUST LEANING INTO THIS AS AN [2:53] OPPORTUNITY TO GROW THEIR [2:54] BUSINESS. [2:55] THEY'RE INTEGRATING STABLE COINS [2:57] AS FAST AS THEY CAN. [2:58] THEY UNDERSTAND THAT THEIR [2:59] CLIENTS WANT ACCESS TO [3:00] CRYPTO ASSETS AND ALL THESE [3:01] FUNDS ARE NOW BEING TOKENIZED [3:02] AND IT'S JUST GOING TO MAKE [3:03] EVERYTHING MORE EFFICIENT IN [3:04] THE FINANCIAL SYSTEM. [3:05] SO I TRULY BELIEVE THAT THIS IS [3:06] AN OPPORTUNITY FOR AMERICAN [3:07] COMPANIES INCLUDING THE BANKS. [3:08] WE'RE VERY INVESTED IN THEIR [3:09] SUCCESS. [3:10] THEY'RE INVESTED IN OUR SUCCESS. [3:11] THEY'RE INVESTED IN OUR SUCCESS. [3:12] THEY'RE INVESTED IN OUR SUCCESS. [3:13] THEY'VE BEEN WORKING WITH US AS [3:14] PARTNERS IN MANY DIFFERENT WAYS [3:15] FOR THE LAST 14 YEARS. [3:16] SO WE'RE AT A PLACE NOW WHERE [3:17] ALL AMERICAN COMPANIES CAN [3:19] FINALLY START TO BUILD THIS [3:20] INDUSTRY. [3:21] MY HOPE IS THAT WITH THIS [3:22] LEGISLATION GETTING THROUGH [3:23] WE'RE ALL GOING TO BE ABLE TO [3:25] WORK TOGETHER A LITTLE BIT MORE [3:26] COLLABORATIVELY. [3:27] NOW WHEN YOU LOOK TO THE [3:29] FULL SENATE IN TERMS OF [3:30] BACKING THIS CLARITY BILL, I [3:32] THINK YOU CAN SEE WHAT YOU [3:33] ABOUT THESE ISSUES AROUND [3:34] CONFLICT OF INTEREST. [3:35] BECAUSE WHAT I'M READING IS THAT [3:37] SENATE DEMOCRATS LIKE SENATOR [3:40] CHRISTIAN GILLIBRAD ARE UNLIKELY [3:42] TO BACK THE BILL UNLESS IT [3:43] INCLUDES SOMETHING ABOUT [3:45] PREVENTING TOP GOVERNMENT [3:46] OFFICIALS AND THEIR FAMILIES [3:48] INCLUDING PRESIDENT TRUMP FROM [3:50] BEING INVOLVED IN THE CRYPTO [3:51] BUSINESS, BRIAN. [3:52] YEAH, SO I KNOW THAT THAT'S [3:54] SOMETHING THAT MAKES THE [3:56] BILL UNLESS IT INCLUDES [3:57] SOMETHING ABOUT PREVENTING TOP [3:58] GOVERNMENT OFFICIALS AND [3:59] THEIR FAMILIES INCLUDING [4:00] BUSINESS, BRIAN. [4:01] YEAH, SO I KNOW THAT THAT'S [4:03] SOMETHING THAT MEMBERS OF THE [4:04] SENATE ARE WORKING ON. [4:05] YOU KNOW, THIS IS NOT OUR ISSUE. [4:06] WE'RE TRYING, FRANKLY, TO KIND [4:08] OF STAY OUT OF IT BECAUSE IT'S [4:09] JUST ABOVE OUR PAY GRADE. [4:10] MY SENSE IS THAT THERE'S BEEN SO [4:12] MUCH TIME INVESTED BY THE SENATE [4:14] AND THEIR STAFF ON THIS ISSUE. [4:15] THEY'RE NOT GOING TO LET THIS [4:17] CONFLICT OR, YOU KNOW, ETHICS [4:18] ISSUE HOLD UP THE BILL AT THIS [4:19] POINT BUT THEY DO NEED TO COME [4:21] TOGETHER AND FIND SOME SORT OF [4:22] SOLUTION IN COLLABORATION WITH [4:23] THE WHITE HOUSE. [4:24] WE'RE TRYING TO STAY OUT OF IT [4:26] BUT I DO HOPE THAT THAT GETS [4:27] RESOLVED TO MAKE SURE THAT A [4:29] FULL SENATE VOTE CAN HAPPEN AND [4:30] GET THIS ON THE PRESIDENT'S [4:31] DESK. [4:32] EXACTLY. [4:33] BECAUSE I CAN'T SEE THE [4:34] PRESIDENT SIGNING THIS INTO LAW [4:36] UNDER THAT SCENARIO WITH [4:38] CHRISTIAN GILLIBRAND TALKING [4:39] SPECIFICALLY ABOUT THE [4:41] PRESIDENT AND HIS FAMILY. [4:42] YEAH, MY HOPE IS THERE'S A [4:45] REASONABLE COMPROMISE TO BE MADE [4:46] HERE AND I KNOW THERE'S ACTIVE [4:48] CONVERSATIONS GOING ON. [4:49] SO WE'LL DO WHAT WE CAN TO HELP [4:51] BUT IT'S NOT OUR SPECIFIC [4:52] ISSUE. [4:53] BRIAN, LET'S TALK ABOUT THE [4:55] QUARTER AND THE BUSINESS. [4:56] YOU HAVE SO MANY DIFFERENT [4:57] LINES OF REVENUE AND INVESTORS [4:59] WANT TO UNDERSTAND BETTER. [5:01] YOU SAID IN THE LAST QUARTER IT [5:03] WAS A TOUGH QUARTER BECAUSE IT [5:05] WAS A CHALLENGING ENVIRONMENT [5:06] BUT THE COMPANY IS HANDLING [5:08] EVERYTHING THAT YOU CAN HANDLE [5:10] OR DEALING WITH EVERYTHING [5:11] THAT YOU CAN DEAL WITH. [5:13] TELL US ABOUT THE QUARTER. [5:14] WHAT DROVE BUSINESS AND WHY [5:16] WAS THE BACKDROP SO [5:17] CHALLENGING? [5:18] YEAH, SO THERE'S SOME [5:20] THINGS THAT ARE IN OUR CONTROL [5:21] AND SOME THINGS THAT AREN'T. [5:22] SO ONE OF THE THINGS THAT'S NOT [5:24] IN OUR CONTROL IS WHAT THE [5:26] MARKETS ARE DOING. [5:27] IT'S JUST LIKE IN [5:28] TRADITIONAL FINANCE, YOU KNOW, [5:29] IF YOU TELL ME WHAT THE S&P 500 [5:31] IS GOING TO BE NEXT QUARTER, [5:32] YOU KNOW, AND I HAD A CRYSTAL [5:34] BALL, YOU COULD PROBABLY TELL [5:35] ME THE REVENUE OF MANY OF [5:36] THESE COMPANIES. [5:37] SO IN OUR WORLD, THE CRYPTO [5:39] SPOT TRADING WAS DOWN THE LAST [5:41] COUPLE OF QUARTERS. [5:42] BUT SOME OF THE NEW PRODUCT [5:44] LINES THAT WE DO HAVE CONTROL [5:45] OVER HAVE STARTED TO GENERATE [5:46] REAL REVENUE. [5:47] THAT'S WHAT WE HAVE BEEN [5:49] INVESTING IN. [5:50] WE'RE STARTING TO SEE GOOD [5:51] TRACTION THERE, BUT WE CAN'T [5:52] CONTROL WHAT THE TRADING MARKET [5:53] IS. [5:54] WE CAN'T CONTROL WHAT THE [5:55] TRADING MARKET IS GOING TO [5:56] REVENUE. [5:57] SO FOR INSTANCE, DERIVATIVES [5:58] TRADING IS NOW AT ABOUT A [5:59] $200 MILLION RUN RATE. [6:00] OUR PREDICTION MARKET PRODUCT [6:01] THAT'S ONLY BEEN LIVE ABOUT TWO [6:02] FULL MONTHS IS NOW AT $100 [6:03] MILLION REVENUE RUN RATE. [6:04] SO THE THINGS THAT ARE IN OUR [6:05] CONTROL ARE GOING QUITE WELL. [6:06] WE CAN'T CONTROL WHAT THE [6:08] TRADING MARKETS ARE DOING IN [6:09] ANY GIVEN QUARTER. [6:10] WE CAN'T CONTROL WHAT THE [6:11] TRADING MARKETS ARE DOING IN [6:12] ANY GIVEN QUARTER. [6:13] THAT'S A GREAT POINT. [6:14] AND TRADING VOLUMES ACROSS THE [6:15] INDUSTRY WERE DOWN. [6:16] BUT, BRIAN, I WANT TO ASK YOU [6:18] ABOUT THE EVERYTHING EXCHANGE. [6:19] TELL US WHERE YOU SEE THAT. [6:21] WHAT IS YOUR VISION HERE IN [6:23] TERMS OF THAT BEING A BIG [6:24] CONTRIBUTOR TO GROWTH AT THE [6:25] COMPANY. [6:26] ALSO WANT TO GET YOUR TAKE ON [6:28] PREDICTION MARKETS. [6:29] THEY ARE BEING USED [6:30] INCREASINGLY ACROSS THE [6:31] BOARD. [6:32] SO MUCH SO THAT THERE IS SEPARATE [6:35] LEGISLATION BEING TALKED ABOUT [6:36] RIGHT NOW IN TERMS OF OVERSEEING [6:38] THE PREDICTION MARKETS. [6:39] START WITH THE EVERYTHING [6:40] EXCHANGE, BRIAN. [6:41] WHAT IS THE POTENTIAL GROWTH [6:42] HERE? [6:43] YEAH. [6:44] WELL, WE BELIEVE THAT CRYPTO IS [6:46] A TECHNOLOGY THAT'S UPDATING [6:48] ALL ASPECTS OF THE FINANCIAL [6:50] SYSTEM AND TRADING IS A CORE [6:52] PILLAR OF THAT. [6:53] SO IT STARTED OFF WITH PEOPLE [6:55] TRADING THINGS LIKE BITCOIN [6:56] AND ETHEREUM, THESE KINDS OF [6:57] ASSETS. [6:58] BUT, INCREASINGLY, THEY ARE [7:00] TRADING COMMODITIES, STOCKS IN [7:02] VARIOUS FORMS AND, YOU KNOW, [7:03] DERIVATIVES ARE NOW COMING ON [7:04] CHAIN. [7:05] PREDICTION MARKETS ARE A BIG [7:06] ONE. [7:07] WE'RE SEEING FOREIGN EXCHANGE OR [7:09] FX MARKETS. [7:10] AND SO THE THING ABOUT CRYPTO IS [7:12] THAT IT CAN JUST MAKE EVERYTHING [7:13] IN FINANCE MORE EFFICIENT. [7:14] SO YOU CAN HAVE LOWER FEES. [7:16] IT CAN BE OPERATING 24-7 INSTEAD [7:18] OF JUST A FEW HOURS DURING THE [7:19] WEEKDAYS. [7:20] IT CAN BE GIVING ACCESS TO PEOPLE [7:22] ALL OVER THE WORLD. [7:23] YOU KNOW, THERE'S ABOUT 4 BILLION [7:25] PEOPLE WHO DON'T HAVE ACCESS TO [7:26] ANY BANK OR BROKERAGE AT ALL. [7:27] SO IT'S KIND OF A DEMOCRATIZING [7:29] ACCESS TO FINANCIAL SERVICES. [7:30] AND I THINK IT WILL JUST MAKE [7:32] CAPITAL MARKETS MORE EFFICIENT. [7:33] BY THE WAY, IT WILL MAKE IT [7:35] EASIER FOR PEOPLE TO RAISE MONEY [7:36] IF THEY WANT TO START A BUSINESS [7:38] OR BUILD SOME REAL ESTATE [7:39] PROJECT OR MAKE A FILM. [7:40] SO CAPITAL FORMATION IS [7:41] SOMETHING THAT COULD ALSO [7:43] BECOME MUCH MORE EFFICIENT. [7:44] SO OUR GOAL IS TO BRING ALL [7:46] THESE ASSET CLASSES ONTO ONE [7:47] PLATFORM WHERE YOU CAN TRADE [7:49] WITH GREAT CAPITAL EFFICIENCY, [7:50] DEEP LIQUIDITY, AND WE'RE DOING [7:51] THAT GLOBALLY. [7:52] THAT'S WHAT WE CALL THE [7:54] EVERYTHING EXCHANGE. [7:55] THAT'S AMAZING. [7:56] AND IT IS BEGINNING TO [7:58] CONTRIBUTE TO THE OVERALL [8:00] GROWTH STORY. [8:01] WHAT ABOUT TOKENIZATION AND [8:04] PAYMENTS, BRIAN? [8:05] HOW DO YOU SEE THAT DEVELOPING [8:07] IN THE COMING, I DON'T KNOW, [8:09] LET'S CALL IT YEAR OR THREE? [8:10] YEAH, SO YOU'RE RIGHT. [8:12] TRADING WAS REALLY THE FIRST [8:14] KILLER USE CASE FOR CRYPTO, BUT [8:16] WE'RE SEEING TOKENIZATION TAKE [8:18] OFF AS WELL. [8:19] I THINK THERE'S SOME [8:21] ESTIMATES THAT IT WILL BE ABOUT [8:23] 30 TRILLION BY THE YEAR 2030 OR [8:25] SOMETHING LIKE THAT. [8:26] SO THESE ARE JUST OTHER [8:28] EXAMPLES OF HOW CRYPTO IS [8:29] UPDATING THE FINANCIAL SYSTEM. [8:30] JUST TO GIVE YOU AN EXPECIFIC [8:32] EXAMPLE ON THE PAYMENT SIDE, [8:33] YOU KNOW, TODAY IT'S PRETTY [8:35] EXPENSIVE TO MAKE PAYMENTS OR [8:36] SLOW, RIGHT? [8:37] I MEAN, IF YOU'RE SWIPING A [8:39] CREDIT CARD, THE MERCHANT IS [8:40] LOSING 2% TO 3% ON THAT [8:41] TRANSACTION. [8:42] IF YOU'RE SENDING A WIRE [8:43] TRANSFER, IT CAN TAKE, YOU KNOW, [8:46] HALF A DAY AND COST $50. [8:48] AND SO IF YOU LOOK AT THE THREE [8:50] WAYS I LIKE TO LOOK AT PAYMENTS, [8:51] ARE THEY FAST, ARE THEY CHEAP, [8:53] AND ARE THEY GLOBAL? [8:54] DO THEY WORK IN EVERY COUNTRY OF [8:55] THE WORLD? [8:56] AND CRYPTO RAILS ARE THE ONLY [8:58] ONES THAT CHECK ALL THREE OF [8:59] THOSE BOXES. [9:00] SO YOU CAN NOW SEND USDC, FOR [9:02] INSTANCE, ANYWHERE IN THE WORLD [9:03] IN UNDER ONE SECOND FOR LESS [9:05] THAN ONE CENT U.S. [9:06] AND IT WORKS IN EVERY COUNTRY OF [9:07] THE WORLD. [9:08] WE'RE GOING TO KEEP UP DATING [9:10] THE FINANCIAL SYSTEM AND MAKE [9:11] SURE THAT THIS CAN BE BUILT HERE [9:12] IN AMERICA. [9:13] SO HOW IS COINBASE ONE [9:15] CHANGING THE ECONOMICS OF YOUR [9:16] BUSINESS RIGHT NOW? [9:17] YEAH, WELL, FOR THOSE WHO [9:18] DON'T KNOW, COINBASE ONE IS OUR [9:19] SUBSCRIPTION PROGRAM. [9:20] IT ALLOWS PEOPLE TO GET ZERO [9:23] FEE TRADING, BETTER REWARDS ON [9:25] DIFFERENT VARIOUS PROGRAMS. [9:26] SO IT'S A LITTLE BIT LIKE [9:27] AMAZON PRIME IS SOMETHING THAT [9:29] PEOPLE COMPARE IT TO AS AN [9:30] EXAMPLE. [9:31] WHAT IT DOES IS IT SHIFTS OUR [9:33] REVENUE FROM BEING AROUND TRADING [9:34] FEES WHICH AS WE TALKED ABOUT [9:36] EARLIER CAN BE A LITTLE VOLATILE [9:38] AND UNPREDICTABLE QUARTER TO [9:40] QUARTER TO QUARTER TO BE MORE [9:42] PREDICTABLE AS A SUBSCRIPTION [9:44] AND SERVICES PROGRAM. [9:45] SO ABOUT HALF OUR REVENUE IS [9:47] FROM TRADING FEES. [9:48] THE OTHER HALF IS NOW FROM [9:49] WHAT WE CALL SUBSCRIPTION AND [9:51] SERVICES. [9:52] BY THE WAY, FIVE YEARS AGO IT [9:54] WAS LIKE 95% TRADING FEES AND [9:56] 5% SUBSCRIPTION AND SERVICES. [9:58] SO WE'RE SEEING A MORE [10:01] PREDICTABLE REVENUE STREAM FROM [10:02] SUBSCRIPTION AND SERVICES. [10:03] THAT'S GIVING US A BETTER [10:05] MULTIPLE IN THE PUBLIC MARKETS [10:06] ON THAT TYPE OF REVENUE. [10:07] AND YOU'RE ALSO KEEPING A HOLD [10:10] ON EXPENSES. [10:11] TELL ME ABOUT THE EXPENSE SIDE [10:13] OF THE BUSINESS HERE. [10:14] IN A CHALLENGING ENVIRONMENT, [10:16] DOES THAT BECOME EVEN MORE IN [10:18] FOCUS? [10:19] ARE YOU EXPECTING TO GET [10:21] EXPENSES DOWN IN THE COMING [10:23] YEARS OR UP? [10:24] YEAH. [10:25] SO WE DEFINITELY ARE FOCUSED ON [10:26] COSTS IN THIS ENVIRONMENT [10:27] COMPANY. [10:29] WE WANT TO MAKE SURE WE'RE [10:30] ALWAYS RUNNING A LEAN AND [10:31] HEALTHY COMPANY. [10:32] SO, YOU KNOW, ACTUALLY LAST [10:34] WEEK WE DID MAKE A DECISION TO [10:36] REDUCE HEAD COUNT BY ABOUT 14%. [10:38] THIS WAS PARTIALLY BECAUSE WE [10:40] SAW CRYPTO SPOT MARKETS WERE [10:41] DOWN. [10:42] BUT IT'S ALSO, FRANKLY, BECAUSE [10:43] WE'RE SEEING THAT THE COMPANY [10:45] CAN RUN MORE EFFICIENTLY WITH [10:46] AI. [10:47] WE'VE ROUGHLY DOUBLED THE OUTPUT OF [10:50] HOW QUICKLY WE'RE SHIPPING [10:52] SOFTWARE PER ENGINEERS OVER JUST [10:54] COMPANY. [10:55] SO, I THINK VERY SOON WE'RE [10:57] GOING TO BE ABLE TO RUN THESE [10:59] SOFTWARE COMPANIES MORE [11:00] EFFICIENTLY. [11:01] I THINK OUR EXPENSES WILL BE [11:03] ROUGHLY FLAT YEAR OVER YEAR AT [11:04] THIS POINT. [11:05] AND WE'LL JUST GET A WHOLE LOT [11:06] MORE DONE. [11:07] AND YOU, OF COURSE, WROTE [11:09] TO EMPLOYEES IN A LETTER ON X. [11:10] YOU MADE THAT PUBLIC IN TERMS OF [11:12] SPEAKING TO THEM WITH THOSE [11:13] CUTBACKS AND THOSE JOB CUTS. [11:15] TELL US ABOUT AI. [11:16] YOU MENTIONED AI IN TERMS OF [11:18] ENSURING THAT THINGS ARE THAT [11:21] MUCH MORE PRODUCTIVE. [11:22] HOW SIGNIFICANT WILL AI BE IN [11:25] TERMS OF RUNNING YOUR BUSINESS [11:26] OVERALL? [11:27] INCREDIBLY SIGNIFICANT. [11:28] I MEAN, I THINK WE'RE IN A, [11:30] SOME PEOPLE MIGHT CALL IT A HARD [11:32] TAKE-OFF SCENARIO FOR AGI. [11:34] YOU KNOW, THE PACE OF [11:35] IMPROVEMENT IS PRETTY [11:36] STAGGERING. [11:37] AND WE'RE SEEING IT ACROSS OUR [11:38] BUSINESS. [11:39] OF COURSE, ON SOFTWARE [11:40] DEVELOPMENT, WE'VE ROUGHLY [11:43] DOUBLED THE OUTPUT YEAR-OVER-YEAR [11:44] THAT WE CAN DO PER ENGINEER. [11:46] BUT WE'VE ALSO SEEN THIS IN OUR [11:48] CUSTOMER SUPPORT PROGRAM. [11:50] ROUGHLY TWO-THIRDS OF OUR [11:51] SUPPORT REQUESTS ARE ABLE TO BE [11:52] ANSWERED BY AI NOW. [11:53] BUT, OF COURSE, YOU CAN STILL [11:54] TALK TO A HUMAN WHENEVER YOU [11:55] WANT TO. [11:56] OUR COMPLIANCE TOOLS ARE ALSO [11:58] GETTING MUCH MORE AUTOMATED. [11:59] I MEAN, HISTORICALLY, WE'VE HAD [12:01] TO EMPLOY THOUSANDS OF PEOPLE [12:03] AND CONTRACTORS TO PROCESS [12:05] VARIOUS CUES AND DO REVIEWS. [12:07] A LOT OF THAT WORK, THE DRUDGERY [12:10] OF IT, THE TASK, YOU KNOW, THE [12:11] TASKS THAT CAN BE TAKEN OFF [12:12] PEOPLE'S PLATE HAS GOTTEN [12:13] DRAMATICALLY BETTER AND WE'RE [12:14] ABLE TO OPERATE THAT MORE [12:15] EFFICIENTLY. [12:16] IT REALLY LIKE FREES PEOPLE UP, [12:18] HUMAN BEINGS, TO GO WORK ON [12:20] HIGHER ROI TASKS. [12:22] AND SO IT TAKES TASKS OFF THEIR [12:23] PLATE. [12:24] AND, OF COURSE, AT THE END OF [12:26] THE DAY, IT'S ALSO SAVING YOU [12:28] MONEY. [12:29] WHAT'S THE OVERALL SAVINGS, [12:30] WOULD YOU SAY, GIVEN THESE [12:32] CUTBACKS THAT YOU'VE ANNOUNCED [12:33] OF THE 14% IN JOB CUTS? [12:35] WHAT'S THE BOTTOM LINE? [12:36] YEAH. [12:37] WELL, IT'LL CHANGE OUR COST [12:39] PICTURE, YOU KNOW, IN THE [12:41] HUNDREDS OF MILLIONS THIS YEAR. [12:42] BUT WE DON'T WANT TO GIVE [12:44] NECESSARILY ANY KIND OF [12:45] FORWARD-LOOKING STATEMENT ON [12:46] THAT GOING FORWARD. [12:47] BUT JUST THE CHANGES THAT WE'VE [12:49] MADE SO FAR THAT WE ANNOUNCED [12:50] EARLIER THIS WEEK OR LAST WEEK, [12:52] IT'LL BE IN THE HUNDREDS OF [12:54] MILLIONS OF SAVINGS AT LEAST [12:55] THIS YEAR. [12:56] TALK TO US ABOUT THE [12:58] REGULATORY MARKET, THE [12:59] REGULATORY BACKDROP, EVEN [13:00] BEYOND JUST WHAT WE WERE TALKING [13:03] ABOUT IN THE CLARITY ACT, [13:04] BECAUSE YOU'RE ALSO TALKING [13:06] ABOUT NEW CONVERSATIONS, NEW [13:07] LANGUAGE AROUND PREDICTION [13:08] MARKETS. [13:09] WHAT ARE YOU EXPECTING? [13:11] WELL, PREDICTION MARKETS I [13:13] THINK ARE ANOTHER VERY EXCITING [13:14] INNOVATION THAT'S HAPPENING [13:16] WITH CRYPTO AND IN OTHER AREAS. [13:18] IT'S REALLY ALLOWING PEOPLE TO [13:20] GET A SENSE OF WHAT IS TRUE IN [13:21] THE WORLD, WHAT IS GOING TO [13:23] HAPPEN NEXT. [13:24] YOU KNOW BETTER THAN ANYBODY [13:26] ELSE, I MEAN, THERE'S LOTS OF [13:27] DIFFERENT MEDIA PROGRAMS OUT [13:28] THERE, THERE'S SOCIAL MEDIA, [13:29] PEOPLE ARE TRYING TO FIGURE OUT [13:31] WHAT IS TRUE IN THE WORLD, [13:32] WHAT'S MISINFORMATION, RIGHT? [13:34] AND EVERYBODY HAS THEIR OWN [13:36] BIAS WHEN THEY'RE PUTTING OUT A [13:38] STORY OR AN ARTICLE OR ANYTHING [13:39] LIKE THAT. [13:40] SO PEOPLE ARE LOOKING AT [13:42] PREDICTION MARKETS AS A WAY TO [13:43] FIGURE OUT, OKAY, LET ME GET [13:44] SOME REAL SIGNAL HERE. [13:45] WHAT DO WE THINK IS GOING TO [13:46] HAPPEN? [13:47] WHAT DO WE THINK IS GOING TO [13:49] HAPPEN IN THE STATE? [13:50] WHAT DO WE THINK IS GOING TO [13:52] HAPPEN IN THE COMING MONTHS SO [13:53] I CAN RUN MY SHIPS THROUGH [13:54] THERE? [13:55] YOU KNOW, IS THIS PARTICULAR [13:57] TAX GOING TO PASS IN [13:58] CALIFORNIA OR DO PEOPLE HAVE [14:00] TO MOVE OUT OF THE STATE? [14:02] THERE'S, YOU KNOW, WHAT IS THE [14:04] SPACEX IPO PRICE GOING TO BE AT [14:06] SO I CAN THINK ABOUT WHETHER I [14:07] WANT TO, YOU KNOW, SELL IT OR [14:08] BUY MORE. [14:09] THIS IS THE KIND OF THING THAT [14:10] PEOPLE ARE LOOKING TO [14:11] PREDICTION MARKETS FOR TO GET [14:12] REAL SIGNAL AND PEOPLE HAVE [14:14] REAL SKIN IN THE GAME WHO ARE [14:16] CONCERNED ABOUT. [14:17] YOU KNOW, WE ARE GOING TO [14:19] TAKE A LOOK AT THE COINBASE [14:20] APP. [14:21] AS I MENTIONED, IT'S NOW $100 [14:23] MILLION REVENUE PRODUCT FOR US [14:25] AFTER JUST TWO FULL MONTHS. [14:26] IT'S GROWING LIKE CRAZY. [14:27] AND I THINK IT'S AN IMPORTANT [14:28] THING. [14:29] NOW, THERE ARE CHALLENGES WITH [14:30] PREDICTION MARKETS WHICH YOU [14:31] ALLUDED TO. [14:32] YOU KNOW, LIKE THERE'S LOTS OF [14:34] TYPES OF CONTRACTS THAT MAYBE [14:36] WE DON'T WANT OUT THERE, YOU [14:38] KNOW, THAT INVOLVE PARTICULAR [14:40] MILITARY PERSONNEL OR SENSITIVE [14:41] INFORMATION OR, YOU KNOW, [14:43] THESE ASSASSINATION MARKETS OR [14:44] THESE PRODUCTS HAVE REAL POSITIVE [14:46] EXTERNALITIES FOR SOCIETY AND [14:47] IT HELPS PEOPLE MANAGE THEIR [14:48] BUSINESS. [14:49] WHAT'S GOING TO HAPPEN IN THE [14:50] FUTURE? [14:51] HE IS VERY THOUGHTFUL ON THIS [14:52] ISSUE AND HE'S MADE IT CLEAR [14:53] THAT HE WON'T TOLERATE ANY [14:54] SORT OF INSIDER TRADING THAT [14:55] PEOPLE ARE DOING. [14:56] THERE'S BEEN SEVERAL CASES [14:57] BROUGHT AGAINST THAT. [14:58] SO I THINK WE NEED TO INSTALL [14:59] IN THE PUBLIC CONSCIOUSNESS [15:00] THIS IDEA KIND OF LIKE WE HAVE [15:02] IN TRADITIONAL SECURITIES THAT [15:03] INSIDER TRADING IS NOT GOING [15:04] TO BE ALLOWED BUT THESE [15:05] PEOPLE ARE GOING TO HAPPEN IN [15:06] THE FUTURE. [15:07] WHAT'S GOING TO HAPPEN IN THE [15:08] FUTURE? [15:09] WE NEED REAL SIGNAL ON THAT. [15:10] YEAH. [15:11] NO, IT'S EXTRAORDINARY. [15:12] TRULY, BRIAN. [15:13] ANOTHER HUGE OPPORTUNITY FOR [15:14] COINBASE AND THE INDUSTRY [15:15] OVERALL AS WE WATCH WHAT KIND [15:17] OF REGULATORY BACKDROP IS [15:19] FORMING. [15:20] COINBASE IS ALSO PARTNERING WITH [15:21] BETTER, A MORTGAGE LENDING [15:22] COMPANY TO POWER THE FIRST EVER [15:24] CRYPTO-BACKED MORTGAGES. [15:25] POTENTIAL HOMEOWNERS WILL BE [15:27] ABLE TO USE BITCOIN OR U.S. [15:28] DOLLAR STABLE COIN TO FUND A [15:30] DOWN PAYMENT IN AN EFFORT TO [15:32] GIVE AMERICANS A NEW PATH TO [15:34] HOMEOWNERSHIP. [15:35] TELL US ABOUT THIS AND HOW YOU [15:37] MONETIZE THAT. [15:38] YEAH, SO, YOU KNOW, MORTGAGES [15:41] ARE JUST ONE MORE WAY THAT [15:43] CRYPTO IS GOING TO UPDATE THE [15:44] FINANCIAL SYSTEM. [15:45] IN THIS CASE WE DID PARTNER [15:47] WITH BETTER ON THIS AND WE HAVE [15:49] LOTS OF CUSTOMERS THAT HAVE [15:51] LOTS OF BITCOIN AND OTHER [15:52] CRYPTO ASSETS AND THEY WANT TO [15:53] GO BUY A HOME. [15:54] THEY DON'T WANT TO HAVE TO SELL [15:56] THEIR BITCOIN TO DO THAT AND SO [15:57] THESE BITCOIN-BACKED MORTGAGES [15:58] ARE A GREAT WAY FOR THIS, IN [16:00] MANY CASES, YOUNGER GENERATION [16:02] TO GO START THE HOMEOWNERSHIP [16:03] PROCESS. [16:04] NOW, OVER TIME WE THINK THAT [16:06] MORTGAGES CAN ACTUALLY COME [16:08] ON CHAIN AND GET EVEN MORE [16:09] EFFICIENT AND LOWER COSTS AND [16:10] THESE KINDS OF THINGS BUT THIS [16:12] IS OUR FIRST STEP INTO IT, INTO [16:14] MORTGAGES WITH THIS GREAT [16:15] PARTNER BETTER. [16:16] SO, AFTER THE VOLUMES THAT WE [16:18] SAW UNDER PRESSURE IN THE FIRST [16:20] QUARTER, BRIAN, HOW DO VOLUMES [16:21] LOOK TO YOU RIGHT NOW? [16:24] WELL, THINGS HAVE BEEN [16:26] TRENDING UP IN THE LAST FEW [16:27] WEEKS OR MONTH OR SO. [16:28] YOU KNOW, I THINK HOPEFULLY [16:30] WE'VE SEEN THE BOTTOM ON THIS [16:32] RECENT WINTER WITH BITCOIN [16:34] TOUCHING, YOU KNOW, 60K OR SO. [16:36] IT'S BACK UP TO ABOUT 80K NOW. [16:38] I THINK CERTAINLY, YOU KNOW, [16:40] THIS LEGISLATION THAT HOPEFULLY [16:41] GETS TO A MARKUP LATER THIS [16:42] WEEK COULD BE A VERY STRONG [16:44] POSITIVE SIGNAL FOR MANY PEOPLE [16:45] OUT THERE. [16:46] YOU KNOW, AND THEN I'D SAY JUST [16:48] LIKE THE OTHER THINGS THAT ARE [16:49] REALLY STARTING TO WORK IN [16:50] CRYPTO, RIGHT? [16:51] LIKE STABLE COINS AND [16:52] PREDICTION MARKETS AND [16:53] TOKENIZATION. [16:54] THESE ARE ALL TAILWINDS THAT I [16:56] THINK WILL DRIVE THE CRYPTO [16:57] PRICES OVER THE COMING YEARS. [16:58] YEAH, BUT BRIAN, LET'S NOT [16:59] FORGET, YOU'VE IDENTIFIED LOTS [17:01] OF GROWTH STORIES AND HAVE PUT [17:03] EVERYTHING IN UNDER YOUR [17:04] UMBRELLA, BUT NOW YOU'VE GOT [17:05] COMPETITORS. [17:06] AND MORE COMPETITORS WILL EMERGE, [17:08] PARTICULARLY, POTENTIALLY [17:10] STRONG COMPETITORS FROM THE [17:11] BANKING SECTOR. [17:12] HOW DO YOU VIEW THE [17:13] COMPETITION AHEAD? [17:14] YEAH, WELL, WE'VE ALWAYS, OUR [17:17] MISSION REALLY IS TO INCREASE [17:18] ECONOMIC FREEDOM IN THE WORLD [17:19] AND TO DO THAT WE NEED TO HAVE [17:21] THOUSANDS OF COMPANIES ALL [17:22] OVER THE WORLD INTEGRATE WITH [17:24] CRYPTO AND HELP BUILD THIS NEXT [17:25] FINANCIAL SYSTEM. [17:26] SO, IN GENERAL, WE ARE VERY [17:28] SUPPORTIVE OF EVERYBODY COMING [17:29] IN. [17:30] YOU KNOW, WE WANT TO SUPPORT THE [17:31] BANKS IN MAKING THIS GREAT [17:32] FOR THEIR BUSINESS. [17:33] FIVE OF THE TOP 20 BANKS IN [17:35] THE U.S., FOR INSTANCE, WE'RE [17:36] POWERING INTEGRATIONS FOR THEM. [17:38] AND THAT'S THE KEY THING FOR [17:39] PEOPLE TO UNDERSTAND IS THAT [17:40] COINBASE CAN PARTICIPATE IN THIS [17:41] VALUE CHAIN BY SELLING SERVICES [17:43] TO ALL THE COMPANIES COMING IN [17:44] AND NOW INTEGRATING CRYPTO. [17:45] SO, WE HAVE SOMETHING CALLED [17:47] COINBASE DEVELOPER PLATFORM [17:48] WHICH PROVIDES, YOU KNOW, [17:49] CUSTODY AND TRADING AND [17:50] PAYMENTS, API'S AND ALL KINDS [17:52] OF THINGS THAT ANY COMPANY CAN [17:54] NOW INTEGRATE CRYPTO. [17:55] AND WE'RE PARTNERING WITH BANKS. [17:56] WE'RE ALSO PARTNERING WITH, YOU [17:58] KNOW, SOCIAL MEDIA COMPANIES [17:59] AND FIN TECHS AND, YOU KNOW, [18:01] NEO BANKS AND ALL KINDS OF FOLKS [18:03] THAT WANT TO INTEGRATE THESE [18:04] NEW, MORE EFFICIENT RAILS. [18:05] WELL, ALL OF THIS AS YOU'RE [18:07] LOOKING MORE AND MORE LIKE A [18:08] BANK, BY THE WAY. [18:09] YOU'RE DOING A LOT OF THE SAME [18:11] THINGS THAT THE BANK IS DOING. [18:13] BUT YOU'RE NOT FDIC INSURED. [18:15] YOU'RE NOT GOING TO FACE THE SAME [18:17] REGULATORY BACKDROP, RIGHT? [18:18] YEAH. [18:20] SO, A BANK LICENSE IS SOMETHING [18:22] WE'VE NOT CURRENTLY CHOSEN TO [18:23] PURSUE. [18:24] THE REASON IS THAT A BANK LICENSE [18:26] IS REALLY MOST USEFUL IF YOU [18:27] WANT TO DO FRACTIONAL RESERVE [18:30] LENDING, YOU KNOW, WHICH WE'VE [18:31] TALKED ABOUT PREVIOUSLY ON YOUR [18:33] PROGRAM. [18:34] AND THAT'S NOT SOMETHING THAT WE [18:35] FEEL GOOD ABOUT, THAT WE DON'T [18:37] FEEL LIKE WE NEED TO DO THAT. [18:38] WE DO HAVE AN OCC TRUST CHARTER [18:40] THAT WE APPLIED FOR. [18:41] NOW, THAT'S 100% RESERVE AND IT'S [18:43] THERE. [18:44] SO THESE THINGS LIKE FDIC [18:46] INSURANCE BECOME LESS RELEVANT [18:47] IF THERE'S, YOU KNOW, IF 100% [18:49] OF THE FUNDS ARE STORED THERE, [18:50] IT'S AUDITED BY DELOIT, ET [18:52] CETERA. [18:53] YOU KNOW, THE SITUATION OF A BANK [18:55] RUN DOESN'T MAKE SENSE IN A [18:56] 100% RESERVE SCENARIO. [18:57] SO THAT'S WHAT WE'VE CHOSEN TO [18:59] DO IS WE'RE NOT GOING TO PURSUE [19:00] A BANK LICENSE AT THIS TIME. [19:02] WE'RE GOING TO KEEP 100% RESERVE. [19:03] I THINK THAT'S BETTER FOR THE [19:04] CUSTOMER. [19:05] NOW, IF THE CUSTOMER WANTS TO OPT [19:07] INTO LENDING OUT THEIR FUNDS AND [19:09] EARN SOME GOOD YIELD ON THAT, [19:10] THOSE ARE PRODUCTS THAT WE CAN [19:11] OFFER. [19:12] BUT WE'RE NOT GOING TO DO [19:13] FRACTIONAL RESERVE. [19:14] WHAT AN INCREDIBLY [19:16] EXCITING TIME FOR YOU AND THE [19:17] COMPANY, BRIAN. [19:18] THANKS SO MUCH FOR WALKING US [19:19] THROUGH IT. [19:20] CONGRATULATIONS AND WE'LL SEE YOU [19:21] SOON. [19:22] THANKS, MARIA.