There’s a lot going on internationally in other jurisdictions such as the EU, so I think it’s a really good time for the Australian Government to push forward and give some legal clarity, but also protect consumers.
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What do you think of the regulation that’s been proposed so far?
Tom: Broadly we think it’s quite good. There are more details that have got to be worked through, and it’s a fast-moving environment, so there are new questions that are coming up all the time. But we’re in favour of what we’ve seen so far.
Recently, I was speaking to a number of local crypto exchanges who were worried about the number of international crypto exchanges setting up shop in Australia. What do you think of the local competition?
John: There’s a lot of humility in Coinbase when we come into a new market. We’ve had international market expansion as a priority recently, and my advice to Nana and the team when coming into somewhere like Australia is that it’s got to be a win-win for everyone.
We have analysed the local players quite closely, but then we’re also comparing ourselves to some other big global exchanges as well who are a lot more visible in this market than we have been, for example, one of them sponsors the AFL.
Coinbase has a legacy of strong governance out of the US, and when you look at consumer protection and the legacy of royal commissions in Australia, you have to be careful how you play in this market.
Coinbase is the largest crypto exchange in the US.Credit:AP
We want to come into [Australia] with an offering that, we believe, is broader than what the local exchanges can offer, both on the retail and the institutional side. We also see a population of quite sophisticated traders here who are really beginning to understand this whole space in terms of an asset class.
You mentioned sports sponsorships before, is that something on the cards for Coinbase in Australia?
John: Anyone who comes to Australia knows how important sport is, so we’d love to be involved in something that’s meaningful, and we believe will be attractive both for the audience and for our own purposes. In the US, you can look into a lot of work we do with the NBA, and fortunately, basketball is incredibly important in this country as well. So watch this space.
There’s been a fair amount of criticism recently from consumer groups recently likening crypto ads to gambling ads and saying they should be regulated. Is that something that concerns you when you’re looking at sponsorships?
Nana: I don’t think we’re taking that approach. I understand the rationale behind your question and I think there have been some companies that have [gone too far]. But we want to drive cultural relevance. Sometimes it’s just about getting your brand out there and making sure that you’re able to support the players – a lot of them are creators and are very interested in the NFT and Web3 space.
We are very excited about empowering creators, and sports is a big angle there. Each country that we go to each every culture has its own passion points, and obviously, in Australia, sports is a huge one. And I think there’s always a creator layer underneath that’s driving that consumer relevance and that particular passion point for that country.
John: To your point about speculation and other negative connotations with the industry, we’re going to remain deep and broad and invested in the ecosystem, even in a period of extended crypto winter. We’re not backing off on any of the initiatives in this environment where maybe some other smaller exchanges may be facing some challenges.
On that, there’s a bit of a perspective that this crypto bear market is worse than the ones we’ve seen previously. There have been some big collapses, Coinbase’s own CEO had to come out and publicly say the company is not bankrupt. Do you think this downturn is worse than the ones we’ve had in the past?
Nana: Every time we have a crash it feels like it’s worse than previous ones. But every time the crypto winter has happened, good things have out of it, even though it’s very tough when it’s actually happening. There is consolidation that happens, where people who are in the industry for the wrong reasons are forced out.
The other thing it does is it really helps all the companies, including us by the way, focus because in a bull market, it’s really hard to focus. But I would say this is definitely in line with some of the ups and downs that we’ve seen in the past. So at least for us, that’s how we look at it.
Tom: What is a bit different this time is that we’ve got a crypto winter at the same time as the macro environment has got a lot more challenging. Crypto is trading more like a tech stock now, where people had thought it was, to some extent, an inflation hedge. So, I think there’s been a market readjustment.
I should just say on the Coinbase side of things, how well capitalised we are which is a message, obviously, that Brian [Armstrong] and others have been giving, which can escape people.
What do you think the future is for crypto? Will we be able to buy a cup of coffee with Bitcoin in five years?
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John: I think people don’t quite appreciate the longevity of stablecoins. If you’ve listened to various reserve bank governors throughout the world, letting the private market drive development and innovation in that space is important. There will be niches of the economy that are very technologically driven that will benefit from blockchain and crypto.
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