Inside Coinbase’s Play To Dominate The Future Of Finance
In Brief
Coinbase expands beyond crypto trading into stablecoins and institutional services, leveraging growing regulatory support, strategic partnerships, and its inclusion in the S&P 500 to drive mainstream adoption and reshape global finance.
Coinbase CEO Brian Armstrong shared ambitious plans to make the crypto platform the world’s top financial services app within the next decade. With traditional financial players increasingly adopting crypto, Armstrong believes the opportunity lies in evolving with the industry.
Speaking on CNBC’s quarterly earnings call, Armstrong emphasized Coinbase’s focus on trading and payments across diverse customer groups.
He predicts that as crypto continues to reshape finance, Coinbase’s position as the leading crypto company will propel it to the forefront of global financial services.
Expanding platform
Coinbase has steadily evolved from a cryptocurrency exchange to a broader financial platform, offering services beyond trading. These services include payments via stablecoins, rewards, staking, and institutional custody. Over 200 institutional clients, such as BlackRock, Stripe, and PayPal, use Coinbase’s products, expanding the company’s reach within traditional finance.
Recent regulatory shifts have also paved the way for more institutional interest in crypto. The U.S. Office of the Comptroller of the Currency (OCC) recently allowed regulated banks to engage in crypto activities like custodianship, following similar actions by the Federal Reserve and FDIC. This shift comes after years of regulatory restrictions.
With the Trump administration loosening crypto regulations and Congress poised to pass stablecoin legislation, financial institutions are eager to integrate crypto solutions. Armstrong believes every major bank will eventually adopt crypto, seeing it as technology to modernize the financial system.
Coinbase is well-positioned to help, offering custodial and stablecoin solutions, though Armstrong cautions that the best approach is interoperability. “You want interoperability with other financial institutions to settle payments and do all kinds of things,” he said, underscoring the importance of network effects in the stablecoin space.
Biggest driver
Stablecoins have emerged as one of Coinbase’s biggest revenue drivers, following trading. In the first quarter, stablecoin revenue surged 50% year-over-year and 32% from the previous quarter.
As a cofounder of the USDC stablecoin, Coinbase shares 50% of the revenue with issuer Circle and earns 100% of the interest from USDC products on its platform. Armstrong has set a “stretch goal” to make USDC the world’s leading stablecoin, currently dominated by Tether’s USDT. “If you can get shared economics, I don’t see why we wouldn’t see more of these banks partnering with USDC,” Armstrong said, highlighting Coinbase’s strategic role in the growing industry.
Coinbase Global Stock Rises. The Company Is Set to Join the S&P 500
Coinbase Global (COIN) saw a significant rise in its stock price after news broke that the crypto exchange would be added to the prestigious S&P 500 index. Following an optimistic trading day, where the stock rose by 4%, Coinbase shares surged by over 9% in after-hours trading, approaching levels not seen since January. This development comes as Bitcoin remains strong, hovering around $102,980.
Coinbase’s inclusion in the S&P 500 marks a historic first for a crypto company. The exchange will replace Discover Financial Services (DFS) in the index before trading opens next Monday. Discover is merging with Capital One Financial (COF), and the regulatory approval for their deal was granted in April.
Following the S&P 500 announcement, shares of Coinbase saw their biggest rally in months, climbing 24% on Tuesday—its sharpest surge since Trump’s 2016 election victory.
Coinbase’s entry into the S&P 500 is expected to drive more institutional investment, as funds tracking the index will now include the company in their portfolios. For Coinbase, this is another step in a turbulent yet transformative journey, solidifying its place in the mainstream financial world amid crypto market volatility.
Coinbase ends PayPal stablecoin fee as payment race heats up
Coinbase is removing fees for purchases of PayPal’s stablecoin, PayPal USD (PYUSD), to boost adoption and increase on-chain payment opportunities for both consumers and institutions.
In a recent blog post, Coinbase outlined its goal to “accelerate the adoption, distribution and utilization” of PYUSD, which has struggled to gain traction since its 2023 launch. With a market cap of just $730 million, PYUSD holds less than 1% of the stablecoin market, far behind Tether’s USDT and Circle’s USDC.
The two companies plan to collaborate on stablecoin-based solutions to enhance global commerce, decentralized finance, and other on-chain use cases. PayPal CEO Alex Chriss expressed enthusiasm about the partnership, aiming to drive innovation and further the adoption of digital currencies. This move reflects the growing competition in the stablecoin space as major players vie for market share and influence.
Stablecoin race
The race for payment stablecoins is intensifying as expectations grow that Congress will pass crypto legislation on stablecoins in the third quarter. Traditionally used for trading and borrowing in the crypto market, stablecoins are now gaining traction among institutions seeking cheaper and more efficient ways to transfer value globally, outside traditional finance.
Circle, the issuer of USDC, recently launched a payments and remittance network for financial institutions, challenging PayPal’s business. Ripple also entered the market with its Ripple USD stablecoin (RLUSD) in December.
PayPal’s vast network of over 430 million users offers a significant opportunity to boost stablecoin adoption, according to Coinbase CEO Brian Armstrong.
Coinbase has long pursued a vision of a global economy built on cryptocurrency, using stablecoins like USDC to diversify revenue beyond crypto trading. Armstrong has a “stretch goal” to make USDC the world’s leading stablecoin.
Coinbase To Dominate?
As Coinbase evolves from a crypto trading platform into a full-scale financial powerhouse, its ambitions are clearly mapped out—from aiming to become the world’s No. 1 financial services app to leading the charge in the stablecoin revolution.
With strategic partnerships, expanding institutional adoption, and entry into the S&P 500, Coinbase is no longer just riding the wave of crypto—it’s helping to shape its future.
As regulation catches up with innovation, Coinbase’s focus on interoperability and utility could very well cement its position at the heart of the next generation of global finance.
Disclaimer
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
