Coinbase CEO responds to Jamie Dimon: "My door is open"

[00:01] Players. I'm in New York City, out of the office for the episode, catching up with Coinbase co-founder and CEO Brian Armstrong. Uh the Coinbase platform is completely being reinvented. What he told me about AI and trading absolutely

[00:16] told me about AI and trading absolutely blew my mind. >> Yeah, I would just say um Coinbase knows how to do an event. Where have you transported me here in New York City?

[00:31] events twice a year, and we use it as a way to just tell the world about everything we've built in the past 6 months. Got a ton of announcements coming out today, and uh some big ones like tokenized stocks, right? Which has

[00:43] period of a couple of years. You know, historically, people have been trying to get stocks on chain, but most of these are like derivatives or synthetics. Uh we're announcing today the first true one-to-one backed tokenized equity, and

[00:56] worlds. You can get upside from the dividends, you can get your shareholder rights, but it's also on chain, which means 24/7 trading, people all over the >> That's cool.

[01:09] >> Uh I'm not pretending that I knew this, but those are real transactions that What am I watching right now? >> Yes, so this is is a real-time feed of them actually by AI AI agents. That's another big focus that we've had of

[01:23] building the uh financial accounts for AI. So, yep, those are happening live right now. >> Where does this all fall into your past. >> Yeah. Well, we really want the Coinbase

[01:36] app to be people's primary financial account. So, we're putting every asset class that they might want to trade. We're also adding financial services crypto-backed mortgage. Um you know, you can do direct deposit. You can earn

[01:50] great rewards on USDC. We have a best-in-class credit card that gives you 4% back in Bitcoin whenever you spend. Um so, we we really want to be the entire life and do it be able to do it in one app. I think financial services

[02:03] is the technology to do it. >> It's amazing to sit here and listen to I talked to you like like a couple years ago it was a crypto trading platform and finally I mean it's here. Like it's come to

[02:17] transformation is this for Coinbase? >> Yeah, I mean you're right 14 years ago Bitcoin and now you can literally manage you can trade stocks and commodities and pre-IPO perpetual futures now with

[02:30] SpaceX and all these other companies coming to market. So, yeah it's a pretty incredible transformation. Um you know, I think that it's allowed us So, sometimes people see all right if Bitcoin's down, I guess crypto's down.

[02:42] still think of you as a crypto company first. for people to update their mental model but for instance, you know, prediction markets which went live earlier this year already doing over a hundred

[02:54] derivatives trading is doing over a two hundred million dollar revenue run rate. Stablecoin payments are just growing like incredibly amount month over month. even if Bitcoin's down and that's just that's been true in financial services

[03:08] some things are down. We want to put the information in front of you often now assisted by AI to help people make good decisions on what to invest in. with the SpaceX and those what perpetual futures?

[03:20] >> Yeah, we call them pre-IPO perps. So, it's a way for people to get access to public cuz you know, it's good that retail is starting to be able to participate in these IPOs but a lot of the value creation happens in the in the

[03:33] private markets too. So, people want to express an opinion on those trades. only outside the US right now but I think you know, we're going to keep working with the agencies to try to get it approved in the US as well and

[03:45] you know, someday I'd love to actually let people invest in private companies and you know, reform the accredited investor laws because in my view they're like you have to be rich to make to get richer basically. It's a It's a

[03:57] Um and what if I think it should be a financial literacy test. So, if you're topics, I think anybody should be able to participate in these private markets. >> Well, how do how would that change the investing landscape, the ability to

[04:11] >> Well, I think it would make it um easier for, you know, private companies to increases the pools of capital. But of course, they would have to put out appropriate disclosures and um you know,

[04:24] that, that of course would still be prosecuted, right? So, you got to make sure you don't get exposed people to any bad actors or scams, but if you pass a financial literacy test, uh you're a smart, you know, upcoming young person,

[04:36] I don't see why you shouldn't be allowed to put $100 into the series C of Anduril company. Like you know, retail investors sometimes have a just as much of an opinion on this as the pros or the or the wealthy people who somehow Like if

[04:50] can somehow do this, but a young, hungry, smart kid can't do it. It because I've been making the case that the retail investor today is way or 15 years ago. I mean, they have tremendous tools at their disposal and

[05:04] >> Yeah. I couldn't agree more. literacy test? Like what would I need to pass? about dollar cost averaging. There could be things about um how to check

[05:18] statements of a company. Uh there could be things about, you know, if the market intend to Are you going to sell immediately? Do you want to buy more? >> [laughter] >> Yeah, like value investing,

[05:32] position sizing. I mean, it's it it will be interesting to try to craft that obviously there's lots of different people out have different theories on investing and um but I think there's a there's there are a commonly a common

[05:44] one could come up with. >> Do you see Coinbase at this point a crypto firm? Like how should investors view your company given everything else you've been working on? >> Yeah, we're absolutely a crypto firm.

[05:58] just building better financial services with crypto. Like we we see that aspects. If you look at the graph of like like trading volume on chain, it's up like 50x over the last 7 years. You know, stablecoin payments are going to

[06:12] be trillions of dollars, you know, by 2030. Tokenization of of assets, it's going to be I think 30 trillion is the estimate by by 2030, right? And now this agentic economy where we are increasingly relying on AI agents to get

[06:26] go buy goods and services. They need to hire teams of agents. That requires new financial infrastructure. So all of these trends mean that financial services are getting updated by crypto and we are the best company in the world

[06:39] than anyone else. We have the most trusted brand and we have this deep crypto expertise to lead lead the world into this new frontier. >> But still, despite all that, when you put out on X that you think Bitcoin has

[06:51] excited. What made you put that out? >> Well, nobody knows for sure on these things, right? But I think if you look at the past trends and just, you know, and like if you if you just look at the past trends in Bitcoin, I I hope I think

[07:05] we we bottomed at 60k or so. But you know, like a lot of things could drive growth of Bitcoin here. I think market structure, legislation passing, I public because they've been soaking up a lot of the risk capital. So once these

[07:19] companies get public and the the unlocks happen, like I think you'll start to see capital move back around. And then we need to go work on the quantum probably depressing the price of Bitcoin a little bit. And Coinbase has been

[07:32] together a quantum crypto advisory council with some really smart people from across the industry. They're helping work with some >> What is what is that problem for those not familiar?

[07:44] this next generation that that's of computers that are coming to market that could potentially break the classic classic just specific to crypto, it's used all over the internet for any kind of secure

[08:00] everyone. So, it's it's a broadly something that the world's going to have to update to. And so, Bitcoin and Ethereum and Solana and these other are all working on road maps to upgrade the underlying crypto

[08:13] cryptographic signatures to make them quantum resistant. And by the way, you know, Coinbase is making updates to our own custody and infrastructure to get you have a Coinbase account, you don't really need to worry about it. We're

[08:25] But, the blockchains themselves need to get updated as well. still fall into these crypto winters? And do you think we're even in one? for Bitcoin specifically. But, the you know, the everything else in crypto is

[08:39] making tie mortgages to crypto. I mean, that's not winterish to me. >> Yeah, I mean, actually I think Coinbase whenever like Bitcoin is down and sometimes like the people who are casually interested in crypto is sort of

[08:52] better like when Bitcoin is down because that's that's our core focus and we just we've been shipping a ton of product. I'd say we're turning ideas into reality like faster than ever before and it's largely due to us being

[09:05] there. Like we're shipping twice as much code year-over-year as as we were and some of our engineers builders that are shipping like 10x as much code as some of their co-workers.

[09:18] we're trying to teach best practices on that and create an environment where we can just outpace any company with AI. bit about it here using AI in the inside the company and I bring this up because

[09:31] Jeremy Allaire. Of course, you know Jeremy over at Circle. And frankly, he scared the hell out of me uh as it pertains to he thinks about where jobs um world broadly into year end and and into next year. He's like, "There's more

[09:43] ways of law of job loss coming because of AI." Like, do you agree with him? >> I I'm more in the camp that AI is going to eliminate tasks and toil, but not jobs. I think that it's just going to free people up to get more work done,

[09:56] higher-level uh tasks done. Um so, I'm actually quite bullish on it. I don't think it's going to increase um unemployment. But, you know, inside different ways. You know, we use it um to write software, we use it to run risk

[10:09] analysis, and automate some of our compliance back office, we use it to do customer support, we use it to do design of our products. Um and I think like in the future, what's exciting is that uh we're actually getting a lot of the uh

[10:23] context uh from each of the teams into a brain, almost like, you know, so every time we get feedback from customers, every time we we run an AB test, every time there's um an incident or anything like that, we can we can actually

[10:36] capture that context and add it to the brain of that team, and you can imagine over time we'll be able to aggregate all of these brains of the team into a kind of creating the company as an intelligence, and the humans are really

[10:49] sure that it's going in the right direction. Um that's the future we're moment of like recursive self-improvement at Coinbase, where in the app. Tens of thousands of these reports a day

[11:05] are being ingested by AI, prioritized, aggregated. Those are turned into pull requests, like bug fixes or new features. And then a human being is things that it came up with that day based on customer feedback. He's like,

[11:18] >> So, the human's just managing these agents. They're they're manager of >> Yeah. And every time that you teach it something, that knowledge goes back into the brain, so that it's smarter the next time it goes around. And so, that's the

[11:30] that'll be a real takeoff. >> How does this AI movement change how you hire for Coinbase? Uh I think one of your hiring just super elite talent. Like how do you

[11:42] define super elite talent? >> Yeah, well, we definitely uh have AI literacy in in our interviews now. And you know, if we oftentimes ask people to interviews. Um if somebody can't do that at this

[11:55] right? I I think it's a baseline for everyone to get hired at Coinbase at legal or fine like all of our teams are are doing this. Um yeah, and then there's definitely um some people who are leading on this and

[12:08] we've done is uh do we've actually created a lot of training. Uh we have a session every month called AI speed runs where we take one of some team or group of people that are doing something that's really an outlier with AI and we

[12:22] I hear from everyone from our board members to our interns that like companies in the world and one of the best parts about working here is that more. >> What's the next big unlock for Coinbase?

[12:38] Um to me that is just about to really >> Yeah. Well, there's a couple that we've we're talking about today. One is that we're actually unifying our global liquidity.

[12:51] for some people, but like 80% of all crypto trading has actually gone it wasn't allowed in the US for a long time. We are the few first US company to get that approved, like true crypto perpetual futures and soon options in

[13:06] strongest in the US. So, we can now unify our US traders with this offshore these offshore traders and put them all in one liquidity pool. And liquidity it has like real a real network effect to

[13:18] >> Sure. >> So, um that's been a huge deal. And then I'd say on this um agentic infrastructure for uh you know, for AI, this is this is another big one. So, we've actually

[13:30] So, one is we we launched Coinbase for agents. This allows you to take any of your existing tools you use like Claude or Codex and connect it right to your Coinbase account. So, you can in that

[13:42] familiar interface if you use Claude or Codex, you can speak in plain English and and ask it, "Hey, can you rebalance my portfolio over the next 3 months and leg into this?" >> Is anybody else doing this? Cuz I've

[13:55] >> Um, I don't think so either. I mean, yeah, so Coinbase for agents is great. You can now connect it right into your account. Um, the second thing we're in the Coinbase account. So, you don't have to use a third-party app. So, we

[14:08] SEC-registered investment advisor. We actually registered the AI agent itself as an investment advisor. Um, and it can give you real financial advice. So, you And then the the third part of it is that um, humans you know, we don't just

[14:23] Like AI agents themselves are going to need their own accounts to go get work um, pay for resources like spin up, you know, a website for you on AWS and GitHub. Um, they're going to need to

[14:37] GitHub. Um, they're going to need to hire other agents that are specialists. agentic economy form where you know, agents are hiring like tens or hundreds of other agents. And they they need new financial infrastructure for this

[14:50] because a lot of the payments they're making are like they're they're small, very fast, like real-time. And the majority of this agentic economy payments are now flowing over the base chain that we built with USDC along with

[15:02] Circle. And a protocol that we announced called X402, which is an open standard for um, agentic payments that we partnered with oversee that. It's in the Linux Foundation now.

[15:15] So, we I think at this point it's fair to say Coinbase has the full stack moment. >> I think you're the right guy to ask this Does this present more market risk if I have

[15:28] I mean you would you would know better >> Well, in some ways, I mean, we've seen algorithmic trading be very prevalent for many years, right? I So, in that sense, but I think this is this

[15:41] to see um this the birth of this new intelligence, if you will. So, it's in the market. >> Yeah, AI agent things that I think we have a real opportunity to do, just looking forward

[15:55] a bit, um is that we can build the leading frontier model for investing, I think, at Coinbase. The reason is that um we have We have we have millions of customers that are now engaging with these, and we

[16:09] recommendation, and you can get feedback pretty quickly, like did it do well? Did pretty quickly, like did it do well? Did it not? And these the scaling laws apply largest proprietary data set, we can train a frontier model for investors.

[16:22] >> How does the successful Clarity Act bring bring this all back into the uh bring this into the fold? >> Yeah, so the Clarity Act would be a a really massive TAM expansion moment for Coinbase and actually all crypto. And

[16:35] so, we've been working hard with uh all parties there to see if we can help get seems to be making great progress. As you know, it came out of the committees. most recently, Senate Banking Committee with bipartisan support. It's already

[16:48] that in the next month or so, we'll get a full Senate floor vote, and then Jamie. I mean, you got to get this I mean, you got This has got to be >> do but do you see like happen? You have to have a reconciliation moment here

[17:01] dude, look, I hear your point, here's my point, like meet in the middle here, the financial system needs reform." >> I would love for that to happen. My door you know, but I don't think it's necessary to get the actually the bill.

[17:15] That's At this point, the Senate has sort of told us told both of us is like and you guys had to make a compromise. It hurt for both sides, but this is what few months. >> All right, well Brian it's good to see

[17:28] for me and Yahoo Finance. I appreciate it and really this is awesome to see the is pretty cool stuff. Thank you so much. I appreciate it. Good to see you. Thank you. All right, that's it for the latest episode of Power Players.