There’s a lot going on internationally in other jurisdictions like the EU, so I think it’s a really good time for the Australian government to push forward and provide some legal clarity but also protect consumers.
What do you think about the regulation that has been proposed so far?
That: Overall, we think it’s pretty good. There are more details to work on, and this is a rapidly changing environment, so there are new questions that keep coming up. But we are in favor of what we have seen so far.
I recently spoke to a number of local crypto exchanges who were concerned about the number of international crypto exchanges setting up shop in Australia. What do you think about the domestic competition?
John: There is a lot of humility at Coinbase when we come to a new market. We’ve recently had international market expansion as a priority, and my advice to Nana and the team when they come to somewhere like Australia is that it has to be a win-win.
We have carefully analyzed the local players, but we are also comparing ourselves to some other major global exchanges that are much more visible in this market than we were, for example, one of them sponsors the AFL.
Coinbase has a legacy of strong governance outside of the US, and when you look at consumer protections and the legacy of royalties in Australia, you have to be careful how you play this market.
We want to enter [Australia] with an offer that, we believe, is wider than what the local stock exchanges can offer, both on the retail side and on the institutional side. We’re also seeing a population of pretty sophisticated traders here who are really starting to understand this whole space in terms of asset class.
You mentioned sports sponsorships earlier, is that something on the cards for Coinbase in Australia?
John: Everyone who comes to Australia knows how important sport is, so we would like to do something that makes sense, and we believe it will be attractive both for the audience and for ourselves. In the US, you can see how much we do with the NBA, and fortunately, basketball is incredibly important in this country as well. So watch this space.
There has been quite a bit of criticism recently from consumer groups who recently compared crypto ads to gambling ads and said they should be regulated. Is that something you worry about when looking at sponsorships?
Nana: I don’t think we have that approach. I understand the reasoning behind your question and I think there are some companies that are [gone too far]. But we want to encourage cultural relevance. Sometimes it’s just about getting your brand out there and making sure you’re able to support the players – many of them are creators and very interested in the NFT and Web3 space.
We’re really excited about empowering creators, and sports is a big angle there. Every country we go to, every culture has its passions, and it’s obvious that sports are huge in Australia. And I think there’s always a layer of creators underneath that drives that consumer relevance and that particular point of passion for that country.
John: As for your thoughts on speculation and other negative connotations with the industry, we will stay deep and wide and invest in the ecosystem, even during the extended crypto winter. We are not giving up on any initiative in this environment where perhaps some other smaller exchanges are facing some challenges.
That being said, there is some perspective that this crypto bear market is worse than the ones we’ve seen before. There have been some major collapses, Coinbase’s own CEO had to come out and say publicly that the company was not bankrupt. Do you think this downturn is worse than the ones we’ve had in the past?
Nana: Every time we experience a crash, it seems to be worse than the last. But every time a crypto winter happens, good things have come out of it, even though it’s very difficult when it actually happens. There’s a consolidation that’s happening, where people who are in the industry for the wrong reasons are being pushed out.
The other thing it does is it really helps all companies, including us by the way, to 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 we’ve seen in the past. At least for us, that’s how we see it.
That: What is a little different this time is that we are having a crypto winter at the same time that the macro environment has become much more challenging. Crypto now trades more like tech stocks, which people thought was, to some extent, a hedge against inflation. So, I think the market has adjusted.
I should just say on the Coinbase side of things, how capitalized we are, which is obviously the message that Brian [Armstrong] and others gave, which can escape people.
What do you think the future of crypto is? Will we be able to buy a cup of coffee with Bitcoin in five years?
John: I think people don’t really appreciate the longevity of stablecoins. If you’ve listened to various Reserve Bank governors around the world, it’s important to allow the private market to drive development and innovation in that space. There will be economic niches that are very technologically driven that will benefit from blockchain and crypto.
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