Protocol | Fintech

How India's crisis turned Coinbase’s product chief into a bitcoin believer

Now Surojit Chatterjee is so convinced of crypto's superiority that he says he wants to "unbank the banked."

Coinbase Chief Product Officer Surojit Chatterjee

Coinbase Chief Product Officer Surojit Chatterjee became a bitcoin believer after seeing real-world money crises.

Photo: Coinbase

Surojit Chatterjee, chief product officer of Coinbase, bought his first bitcoin shortly after the Indian government's stunning announcement in 2016 that most of the country's currency would soon be worthless.

India's demonetization policy, which gave citizens just weeks to deposit or exchange their old bills for new ones, was meant to flush out tax evaders and curb corruption. But the controversial move led to chaos and put Chatterjee in a bind as he struggled to find ways to help his father.

"I was really worried," Chatterjee told Protocol, recalling how his father, who lived in a small village where most people didn't use credit or debit cards or money apps, told him: "I just use physical currencies. I don't know what to do."

His father had to stand line for hours to exchange his bills or deposit them in a bank when the bills still had value. "It was a five-hour wait," Chatterjee, who was then the head of product at Flipkart, the Indian ecommerce company.

It was then, Chatterjee said, that he came to realize that "it's important to hold some bitcoin so I can control my world, I can control my money. That's when I bought my first bitcoin."

The following year, Chatterjee, who had spent eight years at Google where he was a founding member of its mobile search ads product, rejoined the tech giant to lead Google Shopping.

In February 2020, he took a big step into the world of bitcoin and cryptocurrency when he was named Coinbase's chief product officer.

In introducing him, CEO Brian Armstrong highlighted his experiences with Flipkart in India, saying: "When someone has only lived, worked, or transacted in a country like the United States, it can be difficult to grasp the size of the opportunity in simplifying cross-border transactions."

In an interview with Protocol, Chatterjee talked about Coinbase's ambitions beyond being a crypto marketplace and as a pillar of a new financial system. He also reflected on his experiences in India, the lessons from his Google years and why he's both excited and worried about ongoing debates over crypto regulation.

(This interview has been edited for brevity and clarity.)

Coinbase is expected to branch out more aggressively into new markets. What are the new areas that you're focusing on?

Our product strategy has three core pillars. First is crypto as an investment. This is where we think about being the Amazon of assets. We want to continue to make it easy for our 68 million verified users to come and transact on any safe and legal asset that is out there.

The second pillar is crypto as a new financial system. Crypto is entering its utility phase from a purely investment phase, and we want to play a huge part in that. Already around 30% of our users are using more than one product. People are using Coinbase for sending, receiving, borrowing, lending or saving. We're looking at all the ways we can bring financial systems on top of crypto.

Our goal here is to really be the primary financial account for our users. Eventually, you will use your Coinbase account for every financial transaction. We kind of call it "unbank the banked." You are using a bank account [now]. You probably don't need to use it in the future.

Last but not the least is crypto as an application platform. Coinbase Cloud is creating a suite of computing infrastructure services so developers can build crypto applications faster, better, without worrying about everything. You can think of this like AWS for crypto.

There's so much innovation happening in DeFi, NFTs, crypto social networks, gaming, all kinds of stuff. How do we bring that to our 68 million and growing users, and make it really easy for users to access this innovation?

If you look at DeFi, unless you are an expert, it's really difficult to use. You have to jump through many hoops. We are thinking of ways to make it super easy, in a very similar way that we make buying bitcoin very simple and easy for the masses. We want to bring DeFi to the masses.

I usually see this asked on Twitter: Are you adding Shiba Inu coin anytime soon?

I cannot comment on a future addition because of regulatory reasons and things like that. But as I said, we are looking at all safe and legal coin tokens out there. We have been going through the queue and adding as many as possible as quickly as possible.

Should people expect a Coinbase bank account?

Great question. In some way, you have that today. If you put your money in Coinbase, you can actually get yield out of your Coinbase account by staking. We'll continue to expand other services and to a normal user that really looks like a bank account giving a high interest.

Some fintech companies have moved to either buy a bank or apply for bank charters. Is that in the future of Coinbase?

The specifics on whether to get a charter license or not is probably hard for me to make a comment on at this time because we look at the regulatory landscape and figure out what's the right thing for our users.

In terms of functionality, I talked about how we will unbank the banked. If you have a bank account, Coinbase will probably be a better place. We also want to bank the unbanked. There are 2 billion users in the world who are underbanked or not banked completely. Even in the U.S. a large percentage of the population is underbanked.

We think crypto, in general, and Coinbase specifically will be the way for them to get more economic freedom and access all the financial services in the future that are hard to access today for one reason or another.

You were at Google for more than a decade working in payments, advertising and commerce. What are some of the most important lessons for you from that period that you are applying to this role?

I think the first lesson is, if you focus on the user, everything follows. That's one of the Google kind of values. That's something that Coinbase also holds very high. We want to make sure our users can trust us with their money. That's a core principle.

The other big learning, I would say, from Google is there is a lot more to gain by being open, and by working with the ecosystem, rather than creating a closed ecosystem walled garden. Google always did that. At Coinbase we are thinking the same way.

We are creating a DeFi marketplace [where] users can come in and access all kinds of DeFi applications very easily, seamlessly. That's all about embracing the ecosystem, rather than trying to build everything yourself. That was something that Google did very well as well.

What are the Google mistakes that are top of mind for you given your experience there, things that you tell yourself, "Okay, we're not going to do that because that didn't work for Google?"

I'm thinking how much I should give my personal opinion on Google. [Laughs.]

At a high level, if you look back on how the internet evolved in the 2000s, a few things that Google did well first was really expand their horizon and not be just a search company. They could have just said, "Oh, we do search well and just do search." [But they said] this is so early, and we should do a lot of things well and they should scale very quickly.

That is actually something that we also think the same way. It's so early in the crypto industry and there are so many opportunities to grow and scale the company quickly.

In terms of what Google could have done better, these are all well known. Google could have probably invested earlier in social networks or messaging. So I feel like Google did a number of things well and then missed out on a few things.

And that's something that always keeps me awake in the middle of the night, not looking at certain parts of the ecosystem, certain parts of the industry that will become a huge opportunity in the future.

The best way to do that is trying not to build everything yourself, but try to create a platform, and embrace the ecosystem, so the pie gets bigger for everyone. It's not like you are trying to take a bigger share of the pie.

The pie for crypto today is pretty big. But I think it is still less than 1% of what it could be in the future.

What was your reaction when the bitcoin white paper first came out?

To be very honest, I didn't buy bitcoin that early. I wish I did.

What did you think about the technology and what conversations did you have with friends and family?

I am a computer scientist. I studied computer science. In fact, I did a lot of work in distributed systems. So I was very interested and excited about the technology and problem it is solving. Intellectually, I was very curious.

I'll tell you when I bought my first bitcoin. This was in 2016 when I was in India working for Flipkart. India announced demonetization one evening.

It was such a disruption for the whole country because a lot of people, as you can imagine, didn't even have bank accounts.

So what do they do? They're giving money to their friends. I was given money by my maid so I can deposit it in my bank and I can [later] give it back to her, and so on. That's the time when I was like, "Okay, this is why it's important to hold some bitcoin. So I can control my world. I can control my money. And that's when I bought my first bitcoin.

You talked about how your dad had to get in line to deposit his money ...

Everyone needed new currency so there were huge lines at the banks. You get a limited amount of money because the government cannot print all the money at the same time. It was a logistical nightmare.

Can you recall the conversations you had with your dad and your family?

I called him up and asked him, "Hey, what are you going to do? Why don't you use your debit card or credit card?" And he's like, "I've never used a card."

It actually took me some time to understand. I grew up in India. I lived half my life [there]. Even in India, I was in circles that used credit cards, debit cards, digital currency, money apps and all that.

My dad lives in a small town, in a village in India, where the majority of the country still lives. He does not touch those technologies. So he's like, "No, I just use physical currency. And now, I don't know what to do."

So I was really worried. I was in India and was two, three hours away from him by plane. I was like, "Okay, let me figure out something and maybe I'll fly in and give you some cash from somewhere or something like that." It was tough.

I could stand in line and withdraw money or something and give it to him. But he managed it somehow. He was like, "No, I'm still fit."

He was in line for five hours?

Yeah. He walked five miles every single day. So he was fit. But it was tough. It was a five-hour wait. A lot of people who lived through that will tell you the same thing.

Have you discussed bitcoin with your dad?

I have. I think the question behind your question is how will normal people, common people, understand this technology, right?

I have explained it to my dad and I think at this point, if we had Coinbase in India, he would probably use it. In the end, the simplest way to explain it was: "You know money, as you would use it, has no intrinsic value except we ascribe value to it. Government backs it. That's why it has value. With something like bitcoin or Ethereum, it's very similar. It has value because people find it to be valuable. There's limited supply. And it can be used as a medium of exchange."

I'll tell you this story about my dad. The COVID situation in India a few months back, it was a very grim situation. So I decided to send some money for COVID relief in India because people were dying [because] oxygen tanks and things like that were in short supply.

I was trying to send a good sum of money to India, and it was so hard to do that. You had to go to a bank, do a wire transfer. It takes time and there are exchange rates and all this.

Then there are some crypto entrepreneurs in India, some of the founders of Polygon and so on, who were mobilizing for things like oxygen cylinders for people in need in India. I decided to just move my money to their effort. It was on the Ethereum network. It took me three, four minutes, and I could see the money was received, and it was just done.

That hit home for my dad as well. He saw how crypto solves real problems in the world. I told him this story. I'm helping India and he understood.

The technology, its complexity is hard for everyone to understand. My dad will probably not read a blockchain white paper. So for him, he will understand when it's real. And this made it very real. It hit home. "Now I know what you're doing and why it is so important to the world."

One criticism of bitcoin is that, as a payment system, it's still slow compared to the established networks of Visa and MasterCard. Do you have any insights into what kind of role Coinbase could play in that push to make bitcoin a much faster payments system?

Yeah, definitely. You're absolutely right. Bitcoin is slow. But it's like the early internet was very slow, not meant for ecommerce. Now we cannot imagine commerce without the internet. I think the same thing will happen.

All these L2 protocols are coming in. We are already supporting Polygon and Optimism. We are building our teams to help accelerate the whole ecosystem. Like I said, this just helps the whole industry, not just us. You'll see us doing more.

Coming from a country where there are a lot of economic, social and political issues, how did you react to Brian Armstrong's controversial memo that essentially said Coinbase is not going to focus on social and political issues?

We are a mission-oriented company, and we think our mission should bring us together, not divide us. We have this mission to create more economic freedom for the world. That's the one mission we want to focus on, rather than fragmenting our focus as a company into many other social causes, or social issues.

Individually, people are free to pursue any cause they want to pursue. As a company we made a very clear decision on what our focus should be. I feel strongly that that has been great for us and has worked for us.

There's so much to do on this mission [for] more economic freedom for the world. Some of this I have experienced for myself growing up. India was a very closed country economically. It was very difficult to buy foreign goods and so on. Over time, it opened up.

But still, [many] people don't have access to bank accounts. It's not just India. If you look at the entire emerging markets, the markets where currencies go through massive fluctuations and so on that in some way reduce their freedom.

We think crypto is the solution to that. And we want to be the vehicle to that solution and the future. So I feel in some way, if you bring more economic freedom for everyone, that probably solves other societal problems over time as well.

What do you worry about most, Surojit?

One worry is regulators need to understand and get more educated about crypto and the benefits of crypto. Overregulation or misregulation in this space could do enormous harm that could move innovation out of the U.S. to other countries.

That's something that I worry about. Of course we embrace regulation. We think regulation actually brings things more mainstream, in some way. It makes users more confident that, yes, this is all legal and I can use it. But we have to be thoughtful [with] regulation.

The recent discussion in the Senate was actually great. I could see many people could understand. The government seems to have gone deeper into crypto, understands the differences between proof of work and proof of stake and all these kinds of complex concepts.

But I think there is more work to be done to educate everybody in the government on the benefits of this technology, how it can make financial systems more efficient and help the citizens in every country, including the U.S.

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