Welcome to a new episode of Power

Players. I'm in New York City, out of

the office for the episode, catching up

with Coinbase co-founder and CEO Brian

Armstrong. Uh the Coinbase platform is

completely being reinvented. What he

told me about AI and trading absolutely

blew my mind.

Good to see you, man. It's been a while.

>> Likewise, good to see you.

>> Yeah, I would just say um Coinbase knows

how to do an event.

This is like your This is really nice.

Where have you transported me here in

New York City?

>> Yeah, well, we we do these system update

events twice a year, and we use it as a

way to just tell the world about

everything we've built in the past 6

months. Got a ton of announcements

coming out today, and uh some big ones

like tokenized stocks, right? Which has

been a big effort for us for over a

period of a couple of years. You know,

historically, people have been trying to

get stocks on chain, but most of these

are like derivatives or synthetics. Uh

we're announcing today the first true

one-to-one backed tokenized equity, and

it gives you kind of the best of both

worlds. You can get upside from the

dividends, you can get your shareholder

rights, but it's also on chain, which

means 24/7 trading, people all over the

world can access it, and you can even

send it to your friend or your cousin

>> That's cool.

>> like a share of a share of stock just as

a gift.

>> Uh I'm not pretending that I knew this,

but those are real transactions that

were going on that board. Like, what is

What am I watching right now?

>> Yes, so this is is a real-time feed of

transactions happening on chain. Many of

them actually by AI AI agents. That's

another big focus that we've had of

building the uh financial accounts for

AI. So, yep, those are happening live

right now.

>> Where does this all fall into your

vision to become that everything app?

You and I have talked about this in the

past.

>> Yeah. Well, we really want the Coinbase

app to be people's primary financial

account. So, we're putting every asset

class that they might want to trade.

We're also adding financial services

like you can now, you know, get a

crypto-backed mortgage. Um you know, you

can do direct deposit. You can earn

great rewards on USDC. We have a

best-in-class credit card that gives you

4% back in Bitcoin whenever you spend.

Um so, we we really want to be the

financial account for for everyone's

entire life and do it be able to do it

in one app. I think financial services

need to get updated and we think crypto

is the technology to do it.

>> It's amazing to sit here and listen to

this cuz I think back to the first time

I talked to you like like a couple years

ago it was a crypto trading platform and

everything we talked about then is

finally

I mean it's here. Like it's come to

life. Like how big how big a

transformation is this for Coinbase?

>> Yeah, I mean you're right 14 years ago

we were basically just a place to buy

Bitcoin and now you can literally manage

your entire financial life. You know,

you can trade stocks and commodities and

pre-IPO perpetual futures now with

SpaceX and all these other companies

coming to market. So, yeah it's a pretty

incredible transformation. Um

you know, I think that it's allowed us

to diversify our revenue streams too.

So, sometimes people see all right if

Bitcoin's down, I guess crypto's down.

>> You have to hate that because you they

still think of you as a crypto company

first.

>> Yeah, it's going to take a little while

for people to update their mental model

but for instance, you know, prediction

markets which went live earlier this

year already doing over a hundred

million dollar revenue run rate. Our

derivatives trading is doing over a two

hundred million dollar revenue run rate.

Stablecoin payments are just growing

like incredibly amount month over month.

So, lots of things are growing in crypto

even if Bitcoin's down and that's just

that's been true in financial services

for a long time. Some things are up,

some things are down. We want to put the

information in front of you often now

assisted by AI to help people make good

decisions on what to invest in.

>> What did you see on your platform with

with the SpaceX and those what perpetual

futures?

>> Yeah, we call them pre-IPO perps. So,

it's a way for people to get access to

these things before they actually go

public cuz you know, it's good that

retail is starting to be able to

participate in these IPOs but a lot of

the value creation happens in the in the

private markets too. So, people want to

express an opinion on those trades.

Those are pre-IPO perps are available

only outside the US right now but I

think you know, we're going to keep

working with the agencies to try to get

it approved in the US as well and

you know, someday I'd love to actually

let people invest in private companies

and you know, reform the accredited

investor laws because in my view they're

a little bit outdated. You know, it's

like you have to be rich to make to get

richer basically. It's a It's a

regressive tax.

Um and what if I think it should be a

financial literacy test. So, if you're

smart and you get educated on these

topics, I think anybody should be able

to participate in these private markets.

>> Well, how do how would that change the

investing landscape, the ability to

invest in private companies?

>> Well, I think it would make it um easier

for, you know, private companies to

raise money cuz it just increases

increases the pools of capital. But of

course, they would have to put out

appropriate disclosures and um you know,

if there was any fraud or anything like

that, that of course would still be

prosecuted, right? So, you got to make

sure you don't get exposed people to any

bad actors or scams, but if you pass a

financial literacy test, uh you're a

smart, you know, upcoming young person,

I don't see why you shouldn't be allowed

to put $100 into the series C of Anduril

or something. It's still a private

company. Like you know, retail investors

sometimes have a just as much of an

opinion on this as the pros or the or

the wealthy people who somehow Like if

you have a million-dollar net worth, you

can somehow do this, but a young,

hungry, smart kid can't do it. It

doesn't make sense to me.

>> Well, you're speaking my language

because I've been making the case that

the retail investor today is way

different than the retail investor of 10

or 15 years ago. I mean, they have

tremendous tools at their disposal and

frankly, they're pretty damn smart.

>> Yeah.

I couldn't agree more.

>> Right. What would be on a financial

literacy test? Like what would I need to

pass?

>> I think, you know, there could be things

about dollar cost averaging. There could

be things about um how to check

understand the disclosures and financial

statements of a company. Uh there could

be things about, you know, if the market

goes down, what do you what do you

intend to Are you going to sell

immediately? Do you want to buy more?

You just want to hold?

>> Warren Buffett does.

>> [laughter]

>> Yeah, like value investing,

position sizing. I mean, it's it it will

be interesting to try to craft that

financial literacy test because

obviously there's lots of different

people out have different theories on

investing and um but I think there's a

there's there are a commonly a common

set of beliefs and best practices that

one could come up with.

>> Do you see Coinbase at this point

as

a crypto firm? Like how should investors

view your company given everything else

you've been working on?

>> Yeah, we're absolutely a crypto firm.

What they should think of us as we we're

just building better financial services

with crypto. Like we we see that

crypto's updating all these different

aspects. If you look at the graph of

like like trading volume on chain, it's

up like 50x over the last 7 years. You

know, stablecoin payments are going to

be trillions of dollars, you know, by

2030. Tokenization of of assets, it's

going to be I think 30 trillion is the

estimate by by 2030, right? And now

there's this new layer happening with

this agentic economy where we are

increasingly relying on AI agents to get

work done on our behalf. So they need to

go buy goods and services. They need to

hire teams of agents. That requires new

financial infrastructure. So all of

these trends mean that financial

services are getting updated by crypto

and we are the best company in the world

to do that because we store more crypto

than anyone else. We have the most

trusted brand and we have this deep

crypto expertise to lead

lead the world into this new frontier.

>> But still, despite all that, when you

put out on X that you think Bitcoin has

bottomed, I mean you get a lot of people

excited. What made you put that out?

>> Well, nobody knows for sure on these

things, right? But I think if you look

at the past trends and just, you know,

fear and greed index

and like if you if you just look at the

past trends in Bitcoin, I I hope I think

we we bottomed at 60k or so.

But you know, like a lot of things could

drive growth of Bitcoin here. I think

market structure, legislation passing, I

think some of these AI companies going

public because they've been soaking up a

lot of the risk capital. So once these

companies get public and the the unlocks

happen, like I think you'll start to see

capital move back around. And then we

need to go work on the quantum

cryptography issue, too. I think that's

probably depressing the price of Bitcoin

a little bit. And Coinbase has been

doing some good work here. We put

together

a quantum crypto advisory council with

some really smart people from across the

industry. They're helping work with some

of the core developers and

>> What is what is that problem for those

not familiar?

>> Yeah, well, so quantum cryptography is

this

next generation that that's of computers

that are coming to market that could

potentially break the classic classic

cryptography. By the way, this is not

just specific to crypto, it's used all

over the internet for any kind of secure

transactions and banks use it and

everyone. So, it's it's a broadly

something that the world's going to have

to update to. And so,

Bitcoin and Ethereum and Solana and

these other are all working on road maps

to upgrade the underlying crypto

cryptographic signatures to make them

quantum resistant. And by the way, you

know, Coinbase is making updates to our

own custody and infrastructure to get

prepared for this future as well. So, if

you have a Coinbase account, you don't

really need to worry about it. We're

going to just upgrade it all for you.

But, the blockchains themselves need to

get updated as well.

>> Why does crypto

still fall into these crypto winters?

And do you think we're even in one?

>> Yeah, I'd say it's a winter. It's a mild

for Bitcoin specifically. But, the you

know, the everything else in crypto is

like seems to be

>> I'm listening to you. Tell me about

making tie mortgages to crypto. I mean,

that's not winterish to me.

>> Yeah, I mean, actually I think Coinbase

whenever like Bitcoin is down and

sometimes like the people who are

casually interested in crypto is sort of

get distracted and we we tend to do

better like when Bitcoin is down because

that's that's our core focus and we just

we've been shipping a ton of product.

I'd say we're turning ideas into reality

like faster than ever before and it's

largely due to us being

one of the most AI enabled companies out

there. Like we're shipping twice as much

code year-over-year

as as we were and some of our engineers

are really turning into these like super

builders that are shipping like 10x as

much code as some of their co-workers.

And so,

we're trying to teach best practices on

that and

create an environment where we can just

outpace any company with AI.

>> How are you using you talked a little

bit about it here using AI in the inside

the company and I bring this up because

I talked to

Jeremy Allaire. Of course, you know

Jeremy over at Circle. And frankly, he

scared the hell out of me uh as it

pertains to he thinks about where jobs

are going,

um world broadly into year end and and

into next year. He's like, "There's more

ways of law of job loss coming because

of AI." Like, do you agree with him?

>> I I'm more in the camp that AI is going

to eliminate tasks and toil, but not

jobs. I think that it's just going to

free people up to get more work done,

higher-level uh tasks done. Um so, I'm

actually quite bullish on it. I don't

think it's going to increase um

unemployment. But, you know, inside

Coinbase, we use uh AI in lots of

different ways. You know, we use it um

to write software, we use it to run risk

analysis, and automate some of our

compliance back office, we use it to do

customer support, we use it to do design

of our products. Um and I think like in

the future, what's exciting is that uh

we're actually getting a lot of the uh

context uh from each of the teams into a

brain, almost like, you know, so every

time we get feedback from customers,

every time we we run an AB test, every

time there's um an incident or anything

like that, we can we can actually

capture that context and add it to the

brain of that team, and you can imagine

over time we'll be able to aggregate all

of these brains of the team into a

company brain. And so, you're almost

kind of creating the company as an

intelligence, and the humans are really

around the edges aligning it, making

sure that it's going in the right

direction. Um that's the future we're

going to, and I think we'll soon hit a

moment of like recursive

self-improvement at Coinbase, where

customers are giving us feedback right

in the app.

Tens of thousands of these reports a day

are being ingested by AI, prioritized,

aggregated. Those are turned into pull

requests, like bug fixes or new

features. And then a human being is

going to be able to just review like 100

things that it came up with that day

based on customer feedback. He's like,

"Yep, yep, yep, yep. No, no, no, no."

>> So, the human's just managing these

agents. They're they're manager of

agents.

>> Yeah. And every time that you teach it

something, that knowledge goes back into

the brain, so that it's smarter the next

time it goes around. And so, that's the

recursive self-improvement moment

that'll be a real takeoff.

>> How does this

AI movement change how you hire for

Coinbase? Uh I think one of your

competitors mentioned they're only

hiring

just super elite talent. Like how do you

define super elite talent?

>> Yeah, well, we definitely uh have AI

literacy in in our interviews now. And

you know, if we oftentimes ask people to

like build something with AI in the

interviews.

Um if somebody can't do that at this

point, I'd say it's just like a no hire,

right? I I think it's a baseline for

everyone to get hired at Coinbase at

this point. Doesn't matter if you're in

legal or fine like all of our teams are

are doing this.

Um yeah, and then there's definitely um

some people who are leading on this and

some people aren't. I think that what

we've done is uh do we've actually

created a lot of training. Uh we have a

session every month called AI speed runs

where we take one of some team or group

of people that are doing something

that's really an outlier with AI and we

just teach everyone in the company. So,

I hear from everyone from our board

members to our interns that like

Coinbase is one of the most AI enabled

companies in the world and one of the

best parts about working here is that

you get to learn how to level up even

more.

>> What's the next big unlock for Coinbase?

You mentioned a lot of new initiatives.

Um

to me that is just about to really

transform the platform in a very big

way.

>> Yeah.

Well, there's a couple that we've we're

talking about today. One is that we're

actually unifying our global liquidity.

So, this might be a little in the weeds

for some people, but like 80% of all

crypto trading has actually gone

offshore with perpetual futures cuz it

it wasn't allowed in the US for a long

time. We are the few first US company to

get that approved, like true crypto

perpetual futures and soon options in

the US, which means we're actually

strongest in the US. So, we can now

unify our US traders with this offshore

these offshore traders and put them all

in one liquidity pool. And liquidity it

has like real a real network effect to

it, right? It liquidity begets more

liquidity.

>> Sure.

>> So, um that's been a huge deal. And then

I'd say on this um agentic

infrastructure for

uh you know, for AI, this is this is

another big one. So, we've actually

built a suite of tools to handle this.

So, one is we we launched Coinbase for

agents.

This allows you to take any of your

existing tools you use like Claude or

Codex and connect it right to your

Coinbase account. So, you can in that

familiar interface if you use Claude or

Codex, you can speak in plain English

and and ask it, "Hey, can you rebalance

my portfolio over the next 3 months and

leg it if the market dips 5 or 10% then

leg into this?"

>> Is anybody else doing this? Cuz I've

never heard of this before.

>> Um, I don't think so either. I mean,

yeah, so Coinbase for agents is great.

You can now connect it right into your

account. Um, the second thing we're

doing is we're actually putting AI right

in the Coinbase account. So, you don't

have to use a third-party app. So, we

launched Coinbase Advisor, which is an

SEC-registered investment advisor. We

actually registered the AI agent itself

as an investment advisor. Um, and it can

give you real financial advice. So, you

can do that right in the Coinbase app.

And then the the third part of it is

that um, humans you know, we don't just

want to manage our own accounts with AI.

Like AI agents themselves are going to

need their own accounts to go get work

done because they're going to need to go

um,

pay for resources like spin up, you

know, a website for you on AWS and

GitHub. Um, they're going to need to

hire other agents that are specialists.

And I think you'll quickly see an

agentic economy form where you know,

agents are hiring like tens or hundreds

of other agents. And they they need new

financial infrastructure for this

because a lot of the payments they're

making are like they're they're small,

very fast, like real-time. And the

majority of this agentic economy

payments are now flowing over the base

chain that we built with USDC along with

Circle. And a protocol that we announced

called X402, which is an open standard

for um,

agentic payments that we partnered with

Cloudflare and Google and others to um,

oversee that. It's in the Linux

Foundation now.

So, we I think at this point it's fair

to say Coinbase has the full stack

solution that is powering the agentic

economy. And so, it's a very exciting

moment.

>> I think you're the right guy to ask this

one. How does this

Does this

present more market risk if I have

agents

trading for me? Like I I

I mean you would you would know better

than me.

>> Well, in some ways, I mean, we've seen

algorithmic trading be very

prevalent for many years, right? I So,

in that sense, but I think this is this

is slightly different cuz we're starting

to see um this the birth of this new

intelligence, if you will. So, it's

going to be another category of traders

in the market.

>> Yeah, AI agent

>> uh

agentic trading, right? And one of the

things that I think we have a real

opportunity to do, just looking forward

a bit, um is that we can build the

leading frontier model for investing, I

think, at Coinbase. The reason is that

um we have

we have probably the most data, right?

We have we have millions of customers

that are now engaging with these, and we

can say every time the agent made a

recommendation, and you can get feedback

pretty quickly, like did it do well? Did

it not? And these the scaling laws apply

here, right? So, if we can build the

largest proprietary data set, we can

train a frontier model for investors.

>> How does the successful Clarity Act

bring bring this all back into the uh

bring this into the fold?

>> Yeah, so the Clarity Act would be a a

really massive TAM expansion moment for

Coinbase and actually all crypto. And

so, we've been working hard with uh all

parties there to see if we can help get

something over the line. The Senate

seems to be making great progress. As

you know, it came out of the committees.

Um

most recently, Senate Banking Committee

with bipartisan support. It's already

passed the House. So, my hope here is

that in the next month or so, we'll get

a full Senate floor vote, and then

>> You got to you got to have dinner with

Jamie. I mean, you got to get this I

mean, you got This has got to be

>> I'm ready.

>> do but do you see like happen? You have

to have a reconciliation moment here

with like a Jamie Dimon saying, "Hey,

dude, look, I hear your point, here's my

point, like meet in the middle here,

kumbaya, let's keep it moving because

the financial system needs reform."

>> I would love for that to happen. My door

is open whenever he is, and uh

you know, but I don't think it's

necessary to get the actually the bill.

That's At this point, the Senate has

sort of told us told both of us is like

we're going forward in this direction

and you guys had to make a compromise.

It hurt for both sides, but this is what

we came up with and then hopefully it'll

be on the president's desk in the next

few months.

>> All right, well Brian it's good to see

you. You've always made a lot of time

for me and Yahoo Finance. I appreciate

it and really this is awesome to see the

complete reimagination of this platform

is pretty cool stuff. Thank you so much.

I appreciate it. Good to see you. Thank

you. All right, that's it for the latest

episode of Power Players.