Fintech

Coinbase COO: ‘The ship has sailed in crypto. It's here to stay.’

The company's direct listing will "shine a light on crypto in the world," Emilie Choi said.

Coinbase COO Emilie Choi.

Coinbase COO Emilie Choi.

Photo: Coinbase

Coinbase shares began trading Wednesday in what's expected to be a watershed moment for Bitcoin and cryptocurrencies.

The company set a reference price of $250 a share for its direct listing on the Nasdaq. Speculation that it could open at a much higher price, given the massive interest, proved correct: It began trading at $381 a share and rapidly leapt to $429 valuing Coinbase at more than $100 billion, before retreating to $328.28 by the end of trading.

Coinbase Chief Operating Officer Emilie Choi spoke to Protocol Wednesday morning while waiting for the trading to begin, after a somewhat restless night before the big day.

"I'm always scared that my alarm is not gonna go off for some reason," she said. "I feel like I'm still in high school. As it happened, of course, I woke up naturally because I was so excited."

This interview has been edited for clarity and brevity.

This has been described as the Netscape moment for crypto, a turning point for Bitcoin and other digital currencies. How do you see it?

We're going public for an internal and an external reason. We're going public internally because we feel like we have the pieces in place to be able to go public, whether that's the financial foundation, the management team, the employee base that will help us take this to the next level.

And then externally, there are two reasons. One is we want to be able to have a public mark on our stock price because it helps us do more and more M&A. That's the whole reason I came to Coinbase in the first place. We're going to be using acquisitions as a way to accelerate all the different things that we wanted to do.

The second thing is, we believe that this is the moment to shine a light on crypto in the world. If our public listing is a small part of that, we're honored to be able to do that.

Why is M&A critical, and what should we expect from Coinbase going forward now that you're a publicly-traded company?

We have been incredibly active in M&A and we will continue to be even more active in M&A. And the reason for that is that there's so much innovation happening in the crypto ecosystem, and we can't possibly do it all in-house. I think one of the relics of a bad company is a "not invented here" syndrome. [CEO] Brian [Armstrong] has always been one of those people who's like, "Hey, if they're coming up with better ideas on the outside, more power to them. We want to bring them in and we want to bring their innovation in-house."

We've done a number of acquihires. We did Xapo, which helped put us in this position of being the No. 1 crypto custodian in the world. We did Tagomi, which helped us offer a prime brokerage to the world. And most recently we did Bison Trails, which allows us to offer crypto developer tools and infrastructure to help folks build on this ecosystem.

What is your biggest fear today and in the next three months in terms of how the way your company operates changes?

I want everybody to be in this for the long term. Crypto, as you know, has cycles, and whether you're an investor, whether you're a new employee, I want us not to be focused on the short term. I want us to think about things much in the way Amazon did. Nothing matters right now day to day. What matters is that everything is long term, that we're thinking about the trajectory of the company: How do we build the foundation that helps the technology scale, that helps customer service scale and so on and so on. I want to make sure we're hiring the people and grooming the right set of investors who can kind of help think about the long-term vision.

Crypto is still widely seen as an investment tool. When are people going to use Bitcoin or Ether to buy groceries or a cup of coffee?

We think about crypto being a form of money or investment, crypto being a new form of financial system around this new asset class, and then crypto being the new form of an app store, if you will. The thing with the app store analogy is that we don't know which applications are going to be the ones that dominate, in the same way that back in the day when Apple released the App Store, you couldn't have told me, "I know gaming is going to take off, I know messaging is gonna [be big]," whatever it is. And that's the beauty of being a platform. We want to offer the absolute best crypto platform to the world. We will let the activity kind of take place and it will flourish if we offer the right set of tools and infrastructure for that community. What happens there, we don't know, and we don't know the timing, but we think that there's something huge there.

Volatility is still an issue, especially for Bitcoin. What do you tell investors or business owners who worry about that?

As with every major technology shift, you're going to have these waves of volatility in the same way that you saw kind of the things happen when the internet was pioneered. So you have to be comfortable that when you have these tectonic shifts in technology, that there's going to be volatility. If you look at the short term of Bitcoin, if you look at the day to day of Bitcoin or any of these other crypto assets, it's going to look volatile. If you look at the long-term trajectory of Bitcoin, it is up and to the right. So you have to have the mindset of being a long-term investor or employee in our case. We want people who think about this as a generational thing, as opposed to anything that could be short-term thinking.

Two months ago Federal Reserve Chairman Jerome Powell said developing a digital dollar is now a priority. What's your reaction to that?

Digital currency and the digital dollar, those are all things that the government should actively be pursuing. The ship has sailed in crypto. Crypto is a phenomenon, whether or not anybody wants it to be or not. It's here to stay. What I would say is regulators should be embracing it and leaning into it, because we could either help it flourish here in the United States, or we could over-regulate it, or mis-regulate it, and a lot of that innovation will shift to other parts of the world. We have to have this mindset of embracing it and understanding it as opposed to in any way over-regulating it.

What is the kind of regulation that worries you?

If you think about a lot of the kind of flippant comments about [anti-money laundering], right, it's funny to me because if you take a step back, how do I know what you're doing in cash? And so I just think there's a lot of misperceptions about what [crypto] is being used for. There's just foundational education I think that needs to happen to make folks understand that this is taking us into the 21st, the 22nd century. Programmable digital assets — that feels like something that folks should be embracing.

That's a good point to raise. Did you watch the series "Queen of the South" where a drug cartel started using cryptocurrency to launder money? Like you said, there's a perception that for money laundering, it's attractive.

And it's funny because the former CIA director Michael Morell said that that's misinformation. It turns out that crypto has less illicit transactions than cash. If you dig into them and you actually want to approach this with an open mind, you will see that this is actually much better in many ways for understanding how transactions are working in aggregate.

You started your career around the time of the dot-com boom, which turned into the dot-com bust. You also went through the 2007 to 2009 recession. As Coinbase enters this new phase, what lesson is top of mind for you based on those experiences?

Stay the course. Relentlessly focus on the mission, and everything else will solve itself.

The company became controversial a few months ago with a blog post from Brian Armstrong which suggested that Coinbase is not interested in being socially conscious. How has that impacted your culture especially given the reported departures?

We have clarity now. We're being open about what we are and what we're not. And we are focused on the mission, which is something that unites us, not divides us. And so whether we're recruiting or managing our wonderful employees or whatever, there's that clarity now. We understand the folks that left. We wish them all the best and we hope they had a great experience here. And for the folks that are coming in, they know what we're about. And if they're aligned with that, they're going to thrive here.

Fintech

Gavin Newsom shows crypto some California love

“A more flexible approach is needed,” Gov. Newsom said in rejecting a bill that would require crypto companies to get a state license.

Strong bipartisan support wasn’t enough to convince Newsom that requiring crypto companies to register with the state’s Department of Financial Protection and Innovation is the smart path for California.

Photo: Jerod Harris/Getty Images for Vox Media

The Digital Financial Assets Law seemed like a legislative slam dunk in California for critics of the crypto industry.

But strong bipartisan support — it passed 71-0 in the state assembly and 31-6 in the Senate — wasn’t enough to convince Gov. Gavin Newsom that requiring crypto companies to register with the state’s Department of Financial Protection and Innovation is the smart path for California.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Sponsored Content

Great products are built on strong patents

Experts say robust intellectual property protection is essential to ensure the long-term R&D required to innovate and maintain America's technology leadership.

Every great tech product that you rely on each day, from the smartphone in your pocket to your music streaming service and navigational system in the car, shares one important thing: part of its innovative design is protected by intellectual property (IP) laws.

From 5G to artificial intelligence, IP protection offers a powerful incentive for researchers to create ground-breaking products, and governmental leaders say its protection is an essential part of maintaining US technology leadership. To quote Secretary of Commerce Gina Raimondo: "intellectual property protection is vital for American innovation and entrepreneurship.”

Keep Reading Show less
James Daly
James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.
Workplace

Slack’s rallying cry at Dreamforce: No more meetings

It’s not all cartoon bears and therapy pigs — work conferences are a good place to talk about the future of work.

“We want people to be able to work in whatever way works for them with flexible schedules, in meetings and out of meetings,” Slack chief product officer Tamar Yehoshua told Protocol at Dreamforce 2022.

Photo: Marlena Sloss/Bloomberg via Getty Images

Dreamforce is primarily Salesforce’s show. But Slack wasn’t to be left out, especially as the primary connector between Salesforce and the mainstream working world.

The average knowledge worker spends more time using a communication tool like Slack than a CRM like Salesforce, positioning it as the best Salesforce product to concern itself with the future of work. In between meeting a therapy pig and meditating by the Dreamforce waterfall, Protocol sat down with several Slack execs and conference-goers to chat about the shifting future.

Keep Reading Show less
Lizzy Lawrence

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at llawrence@protocol.com.

LA is a growing tech hub. But not everyone may fit.

LA has a housing crisis similar to Silicon Valley’s. And single-family-zoning laws are mostly to blame.

As the number of tech companies in the region grows, so does the number of tech workers, whose high salaries put them at an advantage in both LA's renting and buying markets.

Photo: Nat Rubio-Licht/Protocol

LA’s tech scene is on the rise. The number of unicorn companies in Los Angeles is growing, and the city has become the third-largest startup ecosystem nationally behind the Bay Area and New York with more than 4,000 VC-backed startups in industries ranging from aerospace to creators. As the number of tech companies in the region grows, so does the number of tech workers. The city is quickly becoming more and more like Silicon Valley — a new startup and a dozen tech workers on every corner and companies like Google, Netflix, and Twitter setting up offices there.

But with growth comes growing pains. Los Angeles, especially the burgeoning Silicon Beach area — which includes Santa Monica, Venice, and Marina del Rey — shares something in common with its namesake Silicon Valley: a severe lack of housing.

Keep Reading Show less
Nat Rubio-Licht

Nat Rubio-Licht is a Los Angeles-based news writer at Protocol. They graduated from Syracuse University with a degree in newspaper and online journalism in May 2020. Prior to joining the team, they worked at the Los Angeles Business Journal as a technology and aerospace reporter.

Policy

SFPD can now surveil a private camera network funded by Ripple chair

The San Francisco Board of Supervisors approved a policy that the ACLU and EFF argue will further criminalize marginalized groups.

SFPD will be able to temporarily tap into private surveillance networks in certain circumstances.

Photo: Justin Sullivan/Getty Images

Ripple chairman and co-founder Chris Larsen has been funding a network of security cameras throughout San Francisco for a decade. Now, the city has given its police department the green light to monitor the feeds from those cameras — and any other private surveillance devices in the city — in real time, whether or not a crime has been committed.

This week, San Francisco’s Board of Supervisors approved a controversial plan to allow SFPD to temporarily tap into private surveillance networks during life-threatening emergencies, large events, and in the course of criminal investigations, including investigations of misdemeanors. The decision came despite fervent opposition from groups, including the ACLU of Northern California and the Electronic Frontier Foundation, which say the police department’s new authority will be misused against protesters and marginalized groups in a city that has been a bastion for both.

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Latest Stories
Bulletins