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Protocol | 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.

Protocol | China

China’s edtech crackdown isn’t what you think. Here’s why.

It's part of an attempt to fix education inequality and address a looming demographic crisis.

In the past decade, China's private tutoring market has expanded rapidly as it's been digitized and bolstered by capital.

Photo: Getty Images

Beijing's strike against the private tutoring and ed tech industry has rattled the market and led observers to try to answer one big question: What is Beijing trying to achieve?

Sweeping policy guidelines issued by the Central Committee of the Chinese Communist Party on July 24 and the State Council now mandate that existing private tutoring companies register as nonprofit organizations. Extracurricular tutoring companies will be banned from going public. Online tutoring agencies will be subject to regulatory approval.

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Shen Lu

Shen Lu is a reporter with Protocol | China. She has spent six years covering China from inside and outside its borders. Previously, she was a fellow at Asia Society's ChinaFile and a Beijing-based producer for CNN. Her writing has appeared in Foreign Policy, The New York Times and POLITICO, among other publications. Shen Lu is a founding member of Chinese Storytellers, a community serving and elevating Chinese professionals in the global media industry.

After a year and a half of living and working through a pandemic, it's no surprise that employees are sending out stress signals at record rates. According to a 2021 study by Indeed, 52% of employees today say they feel burnt out. Over half of employees report working longer hours, and a quarter say they're unable to unplug from work.

The continued swell of reported burnout is a concerning trend for employers everywhere. Not only does it harm mental health and well-being, but it can also impact absenteeism, employee retention and — between the drain on morale and high turnover — your company culture.

Crisis management is one thing, but how do you permanently lower the temperature so your teams can recover sustainably? Companies around the world are now taking larger steps to curb burnout, with industry leaders like LinkedIn, Hootsuite and Bumble shutting down their offices for a full week to allow all employees extra time off. The CEO of Okta, worried about burnout, asked all employees to email him their vacation plans in 2021.

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Stella Garber
Stella Garber is Trello's Head of Marketing. Stella has led Marketing at Trello for the last seven years from early stage startup all the way through its acquisition by Atlassian in 2017 and beyond. Stella was an early champion of remote work, having led remote teams for the last decade plus.

It’s soul-destroying and it uses DRM, therefore Peloton is tech

"I mean, the pedals go around if you turn off all the tech, but Peloton isn't selling a pedaling product."

Is this tech? Or is it just a bike with a screen?

Image: Peloton and Protocol

One of the breakout hits from the pandemic, besides Taylor Swift's "Folklore," has been Peloton. With upwards of 5.4 million members as of March and nearly $1.3 billion in revenue that quarter, a lot of people are turning in their gym memberships for a bike or a treadmill and a slick-looking app.

But here at Protocol, it's that slick-looking app, plus all the tech that goes into it, that matters. And that's where things got really heated during our chat this week. Is Peloton tech? Or is it just a bike with a giant tablet on it? Can all bikes be tech with a little elbow grease?

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Karyne Levy

Karyne Levy ( @karynelevy) is the West Coast editor at Protocol. Before joining Protocol, Karyne was a senior producer at Scribd, helping to create the original content program. Prior to that she was an assigning editor at NerdWallet, a senior tech editor at Business Insider, and the assistant managing editor at CNET, where she also hosted Rumor Has It for CNET TV. She lives outside San Francisco with her wife, son and lots of pets.

Protocol | Workplace

In Silicon Valley, it’s February 2020 all over again

"We'll reopen when it's right, but right now the world is changing too much."

Tech companies are handling the delta variant in differing ways.

Photo: alvarez/Getty Images

It's still 2021, right? Because frankly, it's starting to feel like March 2020 all over again.

Google, Apple, Uber and Lyft have now all told employees they won't have to come back to the office before October as COVID-19 case counts continue to tick back up. Facebook, Google and Uber are now requiring workers to get vaccinated before coming to the office, and Twitter — also requiring vaccines — went so far as to shut down its reopened offices on Wednesday, and put future office reopenings on hold.

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Allison Levitsky
Allison Levitsky is a reporter at Protocol covering workplace issues in tech. She previously covered big tech companies and the tech workforce for the Silicon Valley Business Journal. Allison grew up in the Bay Area and graduated from UC Berkeley.
Protocol | China

Livestreaming ecommerce next battleground for China’s nationalists

Vendors for Nike and even Chinese brands were harassed for not donating enough to Henan.

Nationalists were trolling in the comment sections of livestream sessions selling products by Li-Ning, Adidas and other brands.

Collage: Weibo, Bilibili

The No. 1 rule of sales: Don't praise your competitor's product. Rule No. 2: When you are put to a loyalty test by nationalist trolls, forget the first rule.

While China continues to respond to the catastrophic flooding that has killed 99 and displaced 1.4 million people in the central province of Henan, a large group of trolls was busy doing something else: harassing ordinary sportswear sellers on China's livestream ecommerce platforms. Why? Because they determined that the brands being sold had donated too little, or too late, to the people impacted by floods.

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Zeyi Yang
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.
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