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Coinbase CEO discusses new staking service and reactions to regulatory hurdles

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Brian Armstrong, the CEO of Coinbase, told a recent episode of the Bankless podcast that cryptocurrency is the key to updating the current financial system. Armstrong said in the podcast that traditional system is outdated and slow, with laws and codes that are decades old.

“The financial system needs to be updated. It’s slow, it’s archaic. The code is from 40 years ago like the laws are from 100 years ago,” Armstrong said.

He added that despite recent setbacks by FTX and Silvergate, broader trust within crypto has never been higher.

“I believe crypto can update the financial system […] if we elect representatives in a democracy who believe in our values around economic freedom, then all of these regulatory challenges will end up in a good place,” Armstrong predicted.

Coinbase and changes to staking

On several recent changes to Coinbase, Anderson said he was happy to defend the staking mechanism in court. “Coinbase’s staking program is not a security. So we feel comfortable defending that in any way that’s needed,” Armstrong told the podcast.

Coinbase recently announced updates to its staking service a month after U.S. regulators targeted similar products. In an email to users, the cryptocurrency exchange clarified that staking would continue, highlighting that rewards are earned through protocols and not directly from Coinbase. This distinction is essential to U.S. regulators like the SEC, who have raised concerns about the potential for such services to be classified as securities. The update includes changes in how staked assets can be transferred and sold.

He added that Coinbase was also considering several derivatives options. “We’ve been working with the CFTC here to sort of get our derivatives platform going,” he said. “That would be a major thing to be built here in the United States just in terms of like healthy market structure,” he said of Coinbase’s decision to offer derivative products.