The FinTech Report Podcast: Episode 63: John O’Loghlen, MD Coinbase APAC

Speaker A: Welcome to the Fintech Report Podcast. I'm your host, Glenn Frost. Thank you for taking the time to listen to our conversation. This podcast is brought to you in partnership with Vanta. They help build automated, scalable, secure and compliant programs and platforms that work for you, whether it's SoC2, ISO 27001 or managing vendor risk. Vanta's AI power platform makes it easier and faster. Visit vanta.com fintech to connect with Vanta. That's v a n t a.com fintech I also want to thank our friends at Australian Fintech for their support. Sign up to their free FinTech news at australianfintech.com au well, today I'm delighted to welcome John O' Loughlin at Coinbase as our guest on the Fintech Report podcast. Founded in 2012, Coinbase is a digital currency wallet and platform where merchants and consumers can transact with digital currencies like Bitcoin, Ethereum and Litecoin. Coinbase want to make digital currency accessible and approachable for everyone. They're listed on the NASDAQ. The ticker code is COIN. They are regulated by the SEC. They have just under 3,800 employees and US$320 billion on platform. John is MD for Coinbase Asia Pacific. Prior to Coinbase, John spent seven years with Ant Group and Alibaba. He spent many years working in China and other Asian countries. He started off his career with Goldman Sachs in London. So John, thank you very much and welcome, uh, to the Fintech Report Podcast.

Speaker B: Great for being with you, Glenn. Thanks for having us.

Speaker A: Well, you're welcome. Let's kick off with, I guess what we might call the fundamentals of digital assets and crypto and coins. How do you view uh, assets, digital assets like Bitcoin, do you view them as an asset, as a currency, as a commodity?

Speaker B: Well, this is something regulators have been debating, uh, and it's been quite a, well, uh, covered topic. And I don't think all the definitions are uh, necessarily there yet. Uh, as we look particularly in Australia at incoming regulation, uh, there has been a view that uh, a, uh, digital asset is a financial product. Um, we've been very much uh, of the view that uh, is a utility and it shouldn't necessarily be taxed or treated like financial products. Uh, historically and that's been quite, we believe that's quite burdensome. In order for the industry to innovate and uh, to evolve, we need to kind of follow best in class regulation. So it is important to understand that there's quite a broad range of assets in the digital asset landscape. And if we look at the bulk of the market, it is what we call this digital gold, Bitcoin. And that's becoming quite well understood and accepted by all range of investors from boomers right down to uh, children in schools. Um, and so there is a degree of scarcity around that asset. There's a very clear engineering model that kind of drives the creation of that asset. And at some point in time that's a finite uh, journey where that asset will no longer be issued. And then uh, you would um, believe that with supply and demand the price increases if there's still demand for that as an alternative type, um, of currency much like gold. Now this is um, anywhere from 2/3 to 3/4 of the market cap of the industry. If we look at what's left over. The bulk of what's left over are a handful of uh, utility coins and payment coins, uh, like Ethereum, Solana, Polygon, Ripple, uh, there's about 10 of them that have kind of positioned themselves as having a function on the blockchain that enable you to do things on the blockchain. And so that is to put um, products and services and utilities on chain. And so if you think about the world in terms of Web one which was the infancy of the Internet where you could read things, and then web2 which is about um, reading and also writing so you can have some interaction with whoever wrote what was on the Internet. The third iteration, what we call Web3 which is bringing things on chain, is really about owning. And so you get to monetize and own and use your content. And that's where we're seeing a shift from web 2 to web 3.0. So these coins are enabling the web 3 kind of economy. Um, and then you have quite literally thousands of long tail coins, many um, of them yet to prove their value, um, very much in their infancy. Many of them highly volatile and speculative in nature. And a lot of them kind of akin to cultural phenomenons like kids trading cards and Pokemon cards. And then a lot that are probably in a world where they will never be listed uh, on a Coinbase exchange. And so it should, should be quite uh, clear to people that we have a very diligent uh, and strong process to review what assets are listed on Coinbase. And we currently list about 400 odd assets versus other exchanges that uh, probably don't have quite the same level of um, quality and quantitative and qualitative uh, oversight of the market. And they may list 3,000 to 4,000 or 5,000 assets. Um, so that's the world of digital assets in 2025. It's still evolving. Um, and you know, a lot of the exciting projects are really in that long tail. We're just not quite sure which ones are going to germinate to the top and really be the future of payments. And lots of areas that you cover on this podcast and fintech.

Speaker A: Sure. Uh, thank you for that. Um, I understand that uh, many people look at particularly Bitcoin as being the most prominent and as it were popular or ah, m. The one with the most, certainly with the most volatility and seen as a great alternative to things like gold. It's even been called things like digital gold. Um, you mention also that there are long tail of other, um, coins assets that are used for various different things. Um, given that your platform covers, as you say, most of them, um, perhaps that's a good um, segue into. Tell us a bit more about Coinbase. Um, you're listed on the nasdaq. You have a very, very big amount of assets on the platform. Um, tell us a bit more about who your customers are, either globally but also in Australia as well.

Speaker B: Yeah, good question. The bulk of the business is still our retail business. So that is a crypto spot exchange that you access on an app, much the same way people would access Commsec in Australia or Stake or Superhero or Robinhood in North America. And so, uh, upward of half of our business um, is still, you know, retail punters, uh, on the high street. Yourself, myself, opening the ah, app, going into the app, kycing within a couple of minutes, onboarding, uh, linking that to PayID or your bank account and putting some cash into that app and then buying your crypto or bringing crypto in from another wallet. Um, and so that's our um, main business. Every day there'll be a new campaign in that app, uh, some call to action, uh, subscription service. You can be activating, um, a whole suite of products, um, you know, virtual cards, commerce products, um, and even in some markets now, lending products where you can lend out your Bitcoin. The next um, big chunk of our business is our uh, institutional business and that's mainly a custodial business. A product called Coinbase prime where we onboard qualified investors, institutional investors who meet a certain bar. And that's quite a high bar. And those customers in Australia um, are uh, people like some of the super funds, a number of actually local and international digital asset managers here in Australia, market makers, uh, hedge funds, family offices. And we are delighted to have a very Healthy and growing institutional business in Australia and it includes some of the biggest uh, names and you know, traditional fund management um, in Australia. The third bucket of business is what we call our developer pillar of the business. So started with retail, then institutional and then developer. The developer business um, is the one I talked about a few minutes ago where all the innovation is happening and we are uh, bringing uh, lots of blockchain solutions with our own um platform which is called Base. This is a layer 2 Ethereum platform. So we're following the Ethereum protocol and we've been doing a lot to make sure that it's cheaper, easier and faster for people to bring projects on chain. And as you move from web 2 to web 3 a lot of what you're doing um, is limited by the cost of what they call the gas fees associated with transacting on chain. And so if you can make those gas fees close to zero then it's a lot easier to move these um, projects into the Web3 world. Um, historically people are familiar with NFTs, the craze around NFTs that was in the Web3 or the DeFi decentralized finance space. Um, lots of very interesting um, tokenization products where people are looking to fundraise uh, through tokenizing um, and stablecoin products et cetera. Um and so Base is one of the uh, fastest growing and the most fastest adopted layer 2 Ethereum platform. And we are appointing and have been appointing Base ambassadors in all of the kind of interesting geos where um, Defi is growing and this includes the Philippines, Kenya, India etc. So we can really bring those developer populations um, alive. Now what's interesting in those markets a little bit different to Australia and I can talk to the Australian based community here because that's quite alive as well. But in a lot of these emerging markets people are really looking to find ways to improve on and reduce cost of moving money around because they're just getting gouged by remittances. The traditional banking system is not available to them. And so you have a huge number of exciting things happening uh, with stablecoins and DeFi wallets and remittances et cetera and even fundraising. And so um, in the case of India, all of the developers in India who have been working in BPOs and working for you know, PayTM, uh, the big E commerce platforms or developing all of the digital content for the ipl, they probably all have a side hustle of some sort of um, using their engineering skills and their entrepreneurial drive and that's pretty common in Australia these days too in Fintech. If you look at people's LinkedIn posts M& a lot of that will be in blockchain and web3. And so if we can bring them into that base community then there's a massive innovation happening inside one ecosystem. Um, so that's a bit of an unstructured education on the main three main buckets of the Coinbase business.

Speaker A: Excellent. Fascinating. I'm going to jump back to the first part which is the consumer part. Um, how do you make money on that? Is that um, you know, you have a spread or do you have you know like a monthly fee? What's the way that you guys make money off the consumer?

Speaker B: Yeah, quite a traditional uh, spread and a fee. Um, in the brokerage business we clearly make money if assets are going up or down. You know we're a brokerage. Right. We also do have uh, what we call CB1, Coinbase One, which is a very nice subscription business for us. If you follow our investor relationships material that's been growing very nicely. Uh, that's really for traders who are trading probably 10 times or more a month and that really helps their trading fees. They get access uh, to some additional subscription advantages and benefits and services. Um, but yeah, you called it. That's how we operate.

Speaker A: And are you proprietary traders yourselves? Do you deal and trade in all the coins?

Speaker B: We do not. And I think that is something that really separates our brand. A lot of the other big crypto players, particularly some of the large Chinese backed firms and even some of the big local Aussie players, they are what are referred to by the regulators as fully integrated businesses. And I go back to my own days at Goldman Sachs, that doesn't have a negative connotation. But if you're trying to run on IPO and you're talking to a client as a Goldman Sachs investment banker and then you know that your prop trading desk is making a market in maybe the industry or the sector or a competitor of the company that you're trying to, trying to market and raise capital for. And that could potentially be a conflict. We also are very clear uh, that we do not lend any of the assets that we have in custody. Um, and that's something that clearly got some of the other players in the business into some hot water previously. Um, it would mean that we possibly haven't had quite the growth in revenues that some of the other players have had because they're operating these prop trading desks. But we would prefer to really stick to our knitting and be Best in class in providing to people in the industry and the services that we offer.

Speaker A: Excellent. Okay. Now, thank you for clearing that up. Uh, I think it is a big question once you've been in financial services and you understand where you can make money. Uh, it's a call that businesses have to make. Um, let's move to the institutional side of the business, uh, which you call prime. Um, again, is the business model there too? And I appreciate it's early days. Uh, is the business model there to work on a custody fee, project, management fee? Are these institutions, and some of them quite conservative institutions, but obviously starting to realize that Bitcoin's not going away. It's becoming more and more embedded into the, uh, financial services system. We've got, um, a new US President who's promised to make America the crypto capital of the world. That would seem to indicate to everyone around the world that, um, digital assets are progressing more and more to the regulated world and therefore any financial services institution is going to be more and more interested in this category. Um, how do you see that part of your business now versus moving in the future?

Speaker B: Yeah, a lot of questions there. But I think if we broadly look at the institutional space, I mean, the train has left the station. Um, there are hundreds of billions of dollars in this asset class. Everyone is holding it from sovereign states that are putting it into a strategic reserve, um, right through to some of the household names of Australian investing, uh, such as amp. You might not refer to AMP as one of the Vanguard Alpha generators of the past decade, but they've taken a very long term view of the space. Um, they've done their homework and they're diversifying their own asset class. I remember being, um, in the financial sponsors group at Goldman Sachs 20 years ago when we were trying to convince funds they should be investing in this crazy thing called venture capital, um, or even more conservatively, they should be moving into private equity. Um, and so in the case of amp, I mean this is under a percent of their assets under management. It's not going to take the house down if something were to go sideways. But I think it's a very prescient move. Uh, and we're seeing more and more, um, Australian fund managers do this. I think it's interesting to see other people in that institutional space taking interest. Um, we know just through their own filings a number of the major Aussie super funds and the Future fund are investors in Coinbase, the coin stock you mentioned. Um, they don't make much noise about that, but that's a nice validation. Um, and nearly all of them just by default will be investing in Coinbase due to our recent addition to the S&P 500. Um, so by default, if they like it or not, um, they're kind of moving along with this train. Yeah.

Speaker A: You mean you're in the index?

Speaker B: You're in the index, people buy the index, you're getting exposure to it. Right. Um, what I think is very interesting is at the right end of this institutional market is the self managed super space. And obviously that's a trillion dollars under asset. There would not be an RSL chat or a school kid pickup or a uh, Grandparents day event where I don't get asked something about how much should we be putting into crypto. I'm uh, not in the business of offering financial advice, but I think that as just uh, a gauge for interest. You know, you look at this incredible generational wealth transfer in Australia. Although these boomers will be moving hundreds of billions of dollars of property gains, uh, to a next generation, that next generation can't put that money into property. And they're very interested in determining their own financial freedom and their own financial education and really managing their finances a lot more actively. Whether it's through tutorials on YouTube or TikTok or what have you. You know, the stakes and the superheroes of the world did not evolve um, out of an older generation, they evolved out of a demand from a younger generation. Additionally, that generation, once they get Bitcoin, they want to be able to do things with it like borrow on it because they won't have that house to borrow on. And so this is really starting to kind of from a top down level come from this 65 plus cohort. And when they say okay, grandson or daughter or niece or nephew or um, godson is saying we should put 1 to 2% in, that's not too scary for them. Um, and you know in terms of our kind of asset on pay that will probably be about 10x what uh, you know, regular customer has put onto platform. Um, and then again they're really going possibly with a coinbase for that trust. And the same reason that the vast majority of the custodian work from the ETF liftings for BTC and eth Ethereum, um, came to Coinbase. And that comes with a lot of responsibility and a lot of humility. When you're operating for the Blackrocks and the vanguards of the world. That's three or four years of due diligence going on there. So I like to think of this institute of space, institutional space, as having a whole lot of potential in Australia. Just hope we don't tax the hell out of it so much like they have with every other asset class here.

Speaker A: Well, that's a very good point because, um, obviously every nation state does its own thing. But as I said, particularly with the election of Trump, um, and I've noticed, uh, just this week the Reform Party in the UK said they would take crypto, uh, in donations. Um, um, Trump created his own coin for example, or his business created their own coin. Um, so there seems to be a movement from the U.S. uh, to bring all these assets, currencies, commodities into the regulated space. Um, I mean, do you think the English speaking world, do we sort of try and have some kind of harmony in the regulation? Is that how you think it's going to go?

Speaker B: Um, I think it's beyond the English speaking world. I do think people still look to the US for a degree of leadership. Maybe the hegemony is not quite there, but in terms of leadership and the strength of the US dollar, we haven't really had these kind of bric economies break out and come up with some alternative currency that's going to lead global trading. Um, I think there's a very big move on chain for FX trading. There are lots of advantages that for traders as well. Um, and so you clearly have the two big stablecoins, USDC and usdt, uh, both linked to the US dollar. Um, and so that's there. But going back to the original part of your question, I think the President of the United States and his office, they really do not want to cede any more leadership in these critical technology spaces to other competing superpowers, whoever they may be. But we've seen waves of regulation throughout the world and you have three or four key spheres that are driving it. The EU was quite early. They've kind of backed off on some of their regulation and realized a little bit was a bit too burdensome. But the good news there was that it started the regulatory journey en masse across all the EU states. So it was clear for players to work out what they should do. Um, and a lot of that, uh, regulatory work, uh, Coinbase were actively involved in the submissions of that draft legislation. And then so there are some learnings from that regulation. You know, kind of good but not perfect. Um, the Middle east and the Gulf states have also been, uh, courting players with quite strong, you uh, know, tax advantages and other incentives as they do in all sorts of asset classes. And that's well Documented in recent times from sporting franchises to um, airlines, etc. If you move into the Asian world, Singapore's very pro innovation, quite concerned about speculation. And so how do you kind of walk that balance? Um, and so we spend a lot of time with our friends at the MAS because it is really a very important hub for us and it's our Asia Pacific headquarter hub. We do a lot of hiring there, there's a lot of great talent there and it's a great place to be based in this part of the world. But then if you look across just up the road to Hong Kong, um, that regulation, uh, which is in its kind of third phase of reform and review is improving it still, uh, really kind of benefits probably institutions and institutional market more than the retailers. But you know, you have to then appreciate they've had big runs on Hong Kong owned, you know, banks many times before. So they're thinking about how do they protect their consumer. Um, and then in South America we recently got our VASP virtual assets service provider license in South America and Argentina, um, on top of our business in Brazil and we're looking at things in Mexico. And so again that's a very exciting market because they've had such a hammering by being tied to the US dollar. And you may know our founder Brian Armstrong kind of did his oe, as they would call it in Australia as a year abroad, um, in that part of the world and had a firsthand kind of experience with his homestay hosts and his friends of how the US dollars makes it so challenging for South Americans when their currencies are tied to it and kind of at its behest, um, the final GEO to note, which is one that we're looking at closely and we just uh, received approval from the Financial Intelligence unit of the Finance Ministry there is India. And they're at the very front end of working out what their regulations are. But again, you know this from your time in finance. The Reserve bank of India is one of the most respected reserve, uh, banks globally. And they're doing a very complicated job of trying to keep gold and cash of Indians all over the world in market. And, and exactly. Their digital identity program is very, very powerful. And that really came to bear during COVID where they could distribute everything to people's smartphones real time. And they're also very proud of, you know, what they call India Stack. You know, these big companies in India that started out with the Reliances and the Wipros of the world and that BPO boom. They are desperate to move into Web three, um, Post Web two. And again, they have quite sovereign, uh, and strong views of what's right for the Indian economy. And you know, not many foreign companies have really, uh, you know, made out in India that well. So we're re entering that market, you know, very carefully. But we're, we're quietly excited for that market as well. So I think there's a bit of regulatory arbitrage probably for a couple more years. But you know, sitting in Sydney, we cannot afford to delay anymore. The reelected, uh, labor government made some very positive, um, commitments to digital asset regulation. And we really need to hold them to that over the next six to nine months. And I think that will ensure that the next, you know, Canva or the next air trunk and the Web3 space will be from Australia, will keep these engineers on the ground here. We, uh, should be looking at uh, an Australian stablecoin, uh, somewhere someone will come up with the strongest Australian stablecoin soon. And while that will start small, it'll grow and evolve. So I really look at the regulation as something that's not if, but when. And if you look back at the first part of my career, kind of in the mobile phone space, there were huge challenges around regulating airwaves all over the world. There were competing standards. Cdma, GSM M, you know, Korea was on its own standard altogether. And so it slowly all kind of come together and got worked out and you have, you know, global players and operating all over the world. The Qataris are, uh, all over the world and mobile and uh, the US Brands are all over and the Chinese handset makers everywhere. So these are things that you need to kind of put a historical technological lens on. But I think it gets amplified, uh, and people get a little bit more excited about it and possibly over, exuberant about it because the timeframes are compressed and the technology moves so fast and people don't want to miss out.

Speaker A: Yes, no, I understand what you're saying and I do like your analogy with the mobile phone, uh, sector, um, particularly guided by the. There was an international body, the itu, I think, um, that was the sort of global, like a global driving force of that, which I think helps.

Speaker B: Yeah. And you know, Barcelona, World GSM Congress, that is still a really big conference and ironically it's a big conference of crypto and digital asset players because we're looking to partner with all the telcos and the people in the telco world. So, um, yeah, when you've got the same amount of gray hair as uh, your Interviewee does, you can look back to these things and they give you some reassurance that, you know, we'll get there. There are just going to be a few speed bumps on the way.

Speaker A: Yeah, no, I like your vision and I'll take you back to the developer platform base because I think that in itself is a great initiative and it's a great part of your strategy to have almost like ah, an incubator, uh, uh, hub within the business. Um, and I know Ethereum had um, I think it was Ethereum Ventures or something where they, they would seed your business idea with a certain amount of Ethereum, partly because they wanted you to then use their platform, pay their gas fees. And I remember at the time thinking the challenge was that the gas fees were sort of up and down. There was no sort of stability on that and it was very difficult therefore to produce a business case if you didn't quite know what the gas fees were and things like that. Um, could you tell me a little bit more about base? Because I think it's exciting. It's where people who want to develop new uh, services, whether they are. And you mentioned Australia. I mean Australia's got a huge part of our economy that is commodities, that is all those different sort of products, whether it's diamonds, whether it's meat, whether it's hard and soft commodities that have a global perspective. So what's your view, um, on the way that Ethereum operates, the way that base operates and what's the key selling point for people that are looking to create perhaps something on a distributed ledger or something on Ethereum? They can come to Coinbase. Why does it work for them?

Speaker B: Good question. Okay, so I think if you look back to these developer platforms over time, think about AWS, you know, 10, 10 years ago or maybe longer. I remember someone mentioning to me and asking, saying we should hire this individual aws, put a wonderful community manager into the market. And like you said, they kind of.

Speaker A: Was that Dave Engel?

Speaker B: Uh, yeah, one of Dave Engel's colleagues. And so I think at the time people were like, oh, what's Amazon? What's going on here? They must be taking something from us. How are they just giving us free cloud support? How does that work? But by having those communities and those competitions, they provided something really important at the time for cash strapped startups. They couldn't afford the traditional Telstra cloud provider, whoever was operating at the time. And so in some ways there's an analogy with Base that we're at this point in the cycle where we're creating all this innovation. We've become the number one, uh, Layer two in Ethereum and beginning to make some quite serious money out of this business. We have really advanced tools and toolkits and materials available off the shelf for people you can get onto Base, you know, if you have some degree of Web2 or Web3 expertise, probably in a couple of days, um, and then you're kind of up and running and then you've got support services, particularly in these countries where we have these ambassadors, um, assigned and we're looking at hiring one for Australia and New Zealand as well. Um, but to your point, you really need the stability of those fees and the certainty that at some point in time you know, you're not going to get wiped out by some change to the economic model of your business. What I think is a little bit different with BASE and the thesis there is that to your point, you know, some of these other um, protocols and Polygon and Solanas and others have really thrown around a lot of money uh, and really to projects that are probably not worthy projects. And so you know, we um, have been quite, I'd say conservative in the way we've allocated capital from Base, uh, some of it's to hackathons probably more where you know, you'd be judging competitions and choose the best project in that competition. But we're not necessarily funding projects outright per se for the sake of gaining market share. We're lucky we have some really strong endorsers. Um, we're humbled by some of the projects that are associated with us. And it goes in everything from art and IP to restaurant ordering apps, um, to gaming. It's all over the place. Um, but you know, one of these, many of these projects are ah, going to evolve and germinate and percolate into the next kind of unicorn in an on chain sense. Um, and so it's still early days for Base. The business internationally, uh, is still quite young but has really landed um, about 12 months ago with the appointment of these international ambassadors and lots of our engineering team all over the world are kind of unofficial Base ambassadors because they, it's the stuff that I get excited about to be quite honest. While we have the Spot Trading app which is great and we want to be the best there and we've got market share goals and the institutional business. All this stuff happening in DeFi and Web3 is where the innovation's happening. And if you look at a lot of the people who have come out of Tradfi, uh, and they're in custody or they're in a digital asset fund or what have you. And they've all got their PA investment, a bit like all the tech people having their, you know, VC fund of choice. They've all got their own PA investment in something in Web three. And you know, um, we're not too sure what's going to be the uh, all the winners at the end of the day, but that's really where the innovation is happening. Um, one project I just was just at a lunch at um, an hour ago about is looking at a South Australian, you know, solar grid play. Someone who's come out of the defense space in Australia, out of the Signals Directorate and the army or the Air Force, rather strong engineering background, has worked in the energy sector in South Australia before. I think we all know that some pretty serious technology people have had bets on, you know, ensuring there are no brownouts in South Australia going forward. And so uh, this individual just buying batteries in China right now going to be located next to the grid in sa and they want to raise capital, have the ownership through a tokenized structure, um, you know, sometimes the next 12 months. You know, those types of projects on base have real utility and those are things that excite me. Why? Because they're addressing real concerns about the national interest, uh, of the country I live in.

Speaker A: Yeah, indeed. And I think um, there was a company in WA called Power Ledger that was um, very similar, uh, albeit on a sort of more micro, you know, communities producing their own power, trading with each other as well as the sort of centralized power creation and distribution companies.

Speaker B: You've done your research?

Speaker A: Yeah, yeah, um, I met them a number of years ago and I thought it was a great example of the, you know, really the best innovation and the best use of distributed ledgers. M and obviously I think, I think money is the first use case for distributed ledger. I mean, you know, as you say.

Speaker B: Yeah, uh, well, but back to some of your earlier comments on that food provenance journey. I mean I spent 11 years in China in the food space, doing a lot of work with Fonterra, the New Zealand kind of dairy giant, or they call it the Saudi Arabia of milk. Um, and at that time, you know, with counterfeit food and Chinese demand for high end product and the value of, you know, cherries from Central Otago or Tasmania, what have you, everyone's still trying to get this food provenance thing solved. And so there's a business in Australia, Lumachain, that is doing that. They sit opposite us down in Barangaroo, um, And again, there are lots of these on chain. Examples where this solution to my mind is leapfrogged RFID tags on pallets or QR codes, which pinfolds were using when I was at tmall with Alibaba, which there are hacks around and all sorts of other solutions. I mean, a lot of these things should be on the blockchain. And when we talk to, um, our stakeholders in places like India, the land registry or health records, there's just reams and reams and reams of data which, with the intersection of AI, can effectively be moved on chain. And they have sole control of really important databases and lots of public and private information that they then need to utilize at a speed and a scale which allows people to be able to understand who owns that part of that lot of land. And I think we all know if you go back to Coinbase's original mission, it's about increasing economic freedom and bringing a billion people on chain. And, you know, property rights is very central to that. And I think I mentioned Read, Write, Own, and that's a wonderful book, um, out of a 16Z, the Andreessen Horowitz Fund. Um, and if you just Google, Read, Write, Own, it's a really good way to get your head around blockchain. Starting with Web one, back at Yahoo and Netscape and then Web two, basically the e commerce platforms and social media and then Web3. And how can we solve a lot of these ills that have evolved out of Web2?

Speaker A: That's a great summary. You raise a number of, um, issues as well. Um, this idea of who can be banked. So do you have the right to be banked? And who, where and when can debank? Um, and you mentioned hacking as well. Uh, let's start off with banked and debanked. Um, there's been, I mean, I mentioned the Reform Party in the UK just simply because I read that, um, they were going to say cryptocurrency. I mean, there was a famous case where their leader, Nigel Farage, got debanked by coots. I think they used to market themselves as, I think they're now owned by NatWest Group, or they were, and they were meant to be the Queen's bankers, but they debanked him. Um, but a number of people have, uh, spoken about how they've been trying to buy crypto. Their banks wouldn't let them and things like that. What's your view on all this? I mean, is it just the kind of, you know, the froth on top of something that's going to blow away or is it these sort of fundamental issues that the traditional financial services institutions are just trying to block what is an inevitable march towards distributed ledger and digital assets.

Speaker B: Uh, and I think a march towards greater economic freedom for consumers. Um, it is the latter unfortunately, uh, and it's exacerbated in this geography by the big four banks who have such a degree of power and control and super profits, uh, that it's something that is really quite concerning for our industry and for innovation. And so let me just, you know, kind of cut through the fluff to what is debanking? I mean, and you mentioned Nigel Farage being debanked. I have a colleague in the UK who's worked in TradFi for 20 years and he was debanked because he couldn't get a mortgage because the bank said we are not, we don't kind of respect or take into account funds that come from the digital asset space. He's like, these aren't funds. They're paying my salary. I work for Coinbase and S and P listed Fortune 500. Sorry, um, S&P listed NASDAQ, SEC regulated organization. What are you talking about? So I think we're getting tarred with a brush that is so outdated, um, and tied to uh, Silk Road and the Dark web and everyone who uses crypto as a criminal. The reality is, is that the banks and the telcos and the social media platforms have been so overwhelmed with the rise of scams and frauds, uh, whether it's credit cards, sms, e commerce, pig butchering, romance scams, whatever it is, um, they're just deciding to add a whole lot of friction to the payment journey. And uh, there, there's even been directives from, from the banking lobby and people in Canberra around this. There's a little bit of improvement. Now you've seen some absolutely horrendous response times from the banks in terms of getting back to customers who have lost funds. I'm m not even talking about crypto funds, but just funds in general and a pretty woeful customer service journey experience for a lot of these consumers in Australia. Um, debanking does not just hit people on the high street, it hits SMEs, it hits lots of businesses that are banked by the uh, venture capital space trying to invest in digital assets. Um, and it hits uh, people who are working in the industry itself. Um, um, it's not just not being able to get a bank account. There are other restrictions that include having 24 hour holds put on fiat deposits into crypto, which most of the big four and many of the banks are doing right now. The whole reason people are investing in crypto and most assets is for volatility or asset appreciation. Um, or if they're uh, shorting a stock, it's for asset depreciation. And so when people make those trades they need to be able to open an account, get it funded and trade in a timely fashion. When the banks put a 24 hour hold on a first kind of uh, depositor or some entity that you haven't worked with before, that's a pretty serious burden to you and basically null and voids whatever thesis you had. Because in 24 hour time the markets moved and the opportunities passed. Um, not only that, they're limiting the amounts you can deposit to $10,000 a month. Um, and it's all kind of marketed um, as a way of, we're trying to keep you safer. Um, we have approached many of the banks here about our risk payment protocols. We work very closely with a wonderful company called Zepto and there's a few players in this industry who sit between the exchanges and the banks and the fintech space. Um, and we work very hard with them to keep down um, our scam and fraud rates. We have big risk payments teams on call 24 7. We've actually taken proactive information to the banks and said these are account holders we believe are being targeted. Can we do something about it? And oftentimes the response times are weeks and months and so that's quite upsetting where I think from your work in the fintech or the e commerce space, these companies operate real time and that that's to the advantage of the consumers. Um, in terms of criminals, criminals are seven times more likely to use cash than crypto. You know there's endless stats to debunk this idea that crypto is kind of for criminals. Um, there's far more of a digital paper trail if you are using uh, crypto, particularly bitcoin, um, and I think less than 1% of crypto is used for illicit purposes, whereas the numbers are higher for cash. So um, really important that Coinbase and the main industry players here can really publicize this reality because in some cases you have banks double dipping on their own investment products and their prop trading discs selling ETFs, uh, prop trading all sorts of tokens on crypto and then stopping their retail customers from being able to um, have a go themselves. And so I just think that doesn't pass the pub test. That's not right. Uh, and we need to keep working to address this and publicizing that. Debanking is not good for Australia, it's not good for the consumer.

Speaker A: Excellent. Well, thank you very much for that, John. I think we're a little bit constrained for time. I would certainly like to keep, uh, chatting because I think I'm, um, absolutely fascinated with uh, the world of financial services, how it's moving, how it's evolving, how it's changing, giving access to more people to do more things. So, uh, as you say, this is really, really hot topic for many in the financial services sector. So thank you for coming along, telling us a little bit more about um, how Coinbase are uh, um, tackling these issues but growing the business and um, certainly, um, can you give a shout out to base? Uh, um, what's the best way for people to learn more about base? You mentioned you're looking for a M. You said you might be looking for a community champion for base. Um, is that something people can approach you about?

Speaker B: They can certainly approach me. Um, you can find me online pretty easily. Um, love to meet people who would like to be a BASE ambassador. If they're qualified in the Web3 space and they think they know what they're doing, if they've put something onto BASE or another protocol before, they're probably qualified. Uh, and I think more importantly, you know, built communities before. So, yeah, love to, love to hear from Base, um, exponents. Please be in touch. And thanks for having us on the, uh, fintech report.

Speaker A: You're welcome. Thanks very much for being our guest, John Sa.