From trading to infrastructure: Crypto’s real future

Tony Clark: This is the London FinTech podcast, bringing you practical insights and approaches, stories and inspiration from the innovators who are building the new world of financial services. Welcome to the London FinTech podcast. I've spoken to an increasing number of crypto leaders on this show, from Franklin Templeton, from Solana, several other blockchain businesses. But we've not yet spoken to a crypto exchange. So I've been looking forward to this conversation. Why not start with the largest one? Coinbase is an exchange, but it's also a much wider financial platform covering consumer institutional infrastructure, stablecoin and payments. They have a Coinbase Wallet, a prime and custody offering, their own L2 chain, a big partnership with Circle on USDC, stablecoin and much more. Coinbase has over 100 million verified users across 100 countries. This is one of the biggest platforms in the industry. I'm delighted today to be joined by Keith Groth, who is the UK head of Coinbase. He's a plaid alumni who brings open banking era fintech pedigree to leading the world's largest regulated crypto exchange. There's going to be lots to talk about today. Let's go to the show. Keith. It's great to have you on the show, Tony.

Keith Groth: Thanks for having me. It's great to be here.

Tony Clark: Yeah, indeed. So we hear a lot about Coinbase. I've certainly heard a lot about Coinbase and I, uh, think there's quite a lot to the business. So there's going to be loads to talk about today. And I'm really, you know, a traditional finance, more of a tradfi guy. So you're going to have to bear with me a bit on this because some of the things that you're doing on the innovative end of the spectrum and some of the things you're now bringing to market, um, are, uh, you know, are new to quite a lot of the, uh, the consumers and institutions that are out there.

Keith Groth: Yeah, they definitely are. But, um, I think once you understand them, they're really interesting products. So happy to chat through it, as we will.

Tony Clark: But first off, tell us a bit about you, your background and your career journey leading up to Coinbase.

Keith Groth: Yeah, sure. Um, I'm basically an econ and math nerd who got really into financial infrastructure. So I, um, was born in the us, but I'm a dual US UK citizen. Dad's British, mom's American. Started my career in Silicon Valley, uh, in management consulting and then quickly moved to tech and I ended up working on Google Pay and Google Wallet in their very early Years. Um, and this is also when I first heard about crypto and I just got really interested in how money moves around under the ecosystem, you know, of the apps we all see today. This is also the era of wave one. Fintechs being built like Coinbases of the world, Robinhoods of the world. Um, so I stuck around at Google to work on hardware but then decided I'm all in on on financial infrastructure and the future of fintech. And I joined a company called Plaid, which is one of the largest open banking providers and one of the largest private fintechs. I led international expansion for them which is what led me to move to London 19 and I spent four years scaling up their business as general manager here and then move to Coinbase, um, where I'm now the UK CEO and build their business. So I've basically spent my, my whole career working at the edge of payments and consumer financial infrastructure, both in crypto and in traditional fintech.

Tony Clark: In the crypto sector then. So last two or three years perhaps you know, working on other aspects of fintech before.

Keith Groth: Yeah, exactly. So I, so I started out on open banking and mobile payments and then I just saw there's still so much inefficiency there. And as I learned more about the power of blockchain and where I think we're headed with tokenized markets and tokenized Rails, I couldn't resist joining Coinbase and helping drive that from the front here. So happy to chat a little bit about where I think the market is going and some of those things as well.

Tony Clark: Yeah, well we will get to that. Uh, I uh, very much hope and you know, there's so much momentum around the sector now and every time I talk to someone in one of the institutions or from one of the uh, the blockchain firms, they're talking about institutional adoption, they're talking about stablecoin uptake. But then now it's these, the overlay of the, of the lending services, the borrowing, the other things that you can do on chain and uh, the adoption seems to be market wide so it's an exciting time.

Keith Groth: Definitely is. And I would highlight that institutional bit. I think that's what's different over the past two or three years versus five, ten years ago is you're seeing massive institutions, the blackrock's, the JP Morgans of the world getting into this space which tells me I don't, I don't think it's going anywhere.

Tony Clark: Yeah. Okay, so just before we dive into all of that, when you're not working and you Know, everyone I talk to on this show is fully immersed in whatever their, uh, their, their business or their initiative is. And so oftentimes the answer is don't have any free time. But we, we all have to try and make some because it's sometimes it's when you have your best ideas. But what do you do to unwind?

Keith Groth: Well, my biggest thing is I love to go to bookstores. I have a big library at home, and so I, I'm often found if I'm not working, you know, wa Daunt Books or one of the bookstores in London, trying to figure out what's the next, what's the next tome to add to the library? And then when I really need to unwind, I love scuba diving. So at least once or twice a year I try and build a holiday around getting underwater somewhere.

Tony Clark: So we've had scuba diving instructors being the answer on this show once before, but not bookshops. And I always ask people at the end what they're reading or listening to, but I'll bring that question to the top. So given that you like to spend some time in the bookshops in London, uh, what's on the reading list?

Keith Groth: So I have, I'm, I'm in two books right now. On the nonfiction side, I'm reading the Beginning of Infinity by David Deutsch, which is sort of this inspiring, He's a professor inspiring book about, um, you know, there's no, basically no limits to human knowledge and making a strong argument for the fact that we can solve any problem, which is really fascinating. And on the fiction side, I'm reading a book called There Are Rivers in the sky by Elif Shafak, um, which is just a great book, sort of an epic scope book that also takes place in London. So, um, those are keeping me busy when I'm not busy at work. Yes.

Tony Clark: Okay. But I have to confess, I've not heard of either of those. But we'll link them in the show notes and add them to the list.

Keith Groth: They're good.

Tony Clark: Okay. Right, let's talk about Coinbase and the crypto sector. Now, Coinbase is the largest US regulated crypto exchange. How do you think you got there? What was the secret to success so far?

Keith Groth: Yeah, I think a few things. One is early conviction on the mission. And I mean, like, Brian Armstrong was one of the first people to really say, hey, this is going to be the future of finance. I'm going all in on it, initially with Bitcoin, but then expanding from there. But I think the thing that Also really served us beyond being very mission focused because uh. Well, let me stick on that for a second. That attracts people who are also mission focused. And so they ended up building this amazing talent pool of people who are really technical in crypto but really passionate about it. I think that served Coinbase very, very well. But then the second thing is because there was no infrastructure around crypto at a sort of institutional or large tech company scale, we ended up taking a portfolio approach where we had to build our own infrastructure, build the services that institutional traders needed and build the consumer facing app and the good ux. And so then we've basically become essentially an index fund on the crypto ecosystem because we have massive services and all of these including building our own layer two on Ethereum called base. So we have everything all the way down from essentially the metal in crypto up to a consumer app where we're very verticalized and have that portfolio approach which I think has served Coinbase very well as the ecosystem has grown.

Tony Clark: So you're like to crypto what Google is to AI where they have everything all the way down to the.

Keith Groth: A little bit, A little bit. We don't quite have like our own miners or anything like that, but we manage our own staking services, things like that. So we're pretty close to that analogy, I would say.

Tony Clark: Yeah, uh, early mover in covering the full stack. You know, when I spoke to Franklin Templeton on this show and we've had a couple of guests and one of them was a quantum conversation, but we uh, talked crypto with Sandy Call, who's very well known in the sector and she's a huge proponent of this is the next 50 years of finance. We're past the tipping point for both consumer and institutional adoption. What's your view?

Keith Groth: I think 100% I agree with that. The question is just how fast is it going to grow and how long will it take to embed itself in everyday life of individuals. But I think the reason for that, if I could like sort of step back and explain it clearly, is that when you have blockchains you can, and you tokenize capital markets. So essentially you have tokens on these blockchains that represent bonds, equities, cash, crypto. You can manage your risk position instantly and automatically. You can build smart contracts, essentially manage the financial flows and you can obviously manage your liquidation waterfalls, all of that very automated. So if you think about so much of the middle and back office of large financial institutions is built around trying to understand what's the risk position in my institution or in this client right now. And also you have to wait 24 hours, 48 hours, 72 hours to move money like settle cash and buy bonds, things like that. That will all happen instantly. It's very obvious, I think to players like Coinbase, but also the large institutions that this infrastructure is going to drive real value. And so I actually think it's going to start to grow in the institutional side and then over time come more into the consumer side in developed markets. Right now, the consumer value, a lot of it is still in emerging markets, but it's coming more and more into developed markets as well.

Tony Clark: Yeah, I think that's right. And whilst I don't have full line of sight, you know the, the headlines, early headlines around crypto, whether the institutions were going to set up a bitcoin trading desk or launch some ETFs. But, but how much are you seeing rewiring of the Treasury Department and you know, finance going on to stablecoin infrastructures?

Keith Groth: Uh, uh, a lot. I mean you can see right with the genius act in the us, the US has gone all in on USD backed stablecoins. In the uk, they actually just did an indus, a worldwide leading launch of government bonds on the blockchain with the digit program here in the UK. Um, you've also seen now, I think one in five of all the Fortune 500 executives are building a strategy around stablecoins or blockchain technology inside of their business. So I think it is up there with AI in the sense of every major boardroom in financial services is thinking about this space and that's a great sign for the industry and where it's heading. And it truly is up there with AI in terms of, I think the impact it's going to have on our ecosystem.

Tony Clark: I had the head of content from Money20 20 on this show a few weeks ago and we're going to be at the show and I sort of put Ollie on the spot a bit and went AI or blockchain? And he said, no, it's AI or stablecoins was his reply. And I think that's um, you know, really consensus on what you just said, that there's um, huge adoption. It's right up there on the top of the agenda. Before we jump right into today's episode, a quick thank you to our sponsor, nextwave. Nextwave is an award winning consultancy that is helping many of the world's leading banks, investment managers and insurers deliver on their growth, efficiency, risk and control goals and transform their business. With a senior team who have come from MD level positions in major firms like HSBC, Barclays and UBS. NextWave has both the deep industry expertise and the hands on capabilities in AI, data and automation to drive real results, more business outcomes and less PowerPoint from the consulting experience as their clients like to say. Nextwave has moved two week manual processes to five minute agentic automations, rescued global banking regulatory control programs and digitized deal platforms, sustainability and regulatory reporting systems. And they do much of this with hands on engineering capabilities on leading technologies which include ServiceNow, Alteryx, Quantexa, UH and Camunda. So if a modern and specialist alternative to the big brand consulting model sounds appealing, one which covers the full life cycle of strategy specialists and solutions, but with small practitioner teams, rapid delivery and a better price point, then perhaps you should talk to NexWave next. Visit nxwave.com to find out more and get in touch. That's nx wave.com all right, let's get back to the episode. Can I ask, can I ask you, um, so you came from Pleb and you talked about open banking. Um, on the consumer side, do you think crypto's had its open banking moment yet or are we still a little bit away from that?

Keith Groth: To some extent, yes. So like what's happened is everyone knows about Bitcoin and everyone knows what crypto is now, right? So like the awareness is there like 90% of consumers, consumers know bitcoin and no crypto. And it's becoming more and more just an accepted asset class within an investor's portfolio. You're starting to see personal wealth advisors advising, you know, keep 1%, keep 2% in Bitcoin just like you would with gold or cash. And so I think in that way it's starting to permeate the consumer mindset. But we haven't had yet, I think is the consumer iPhone moment of I get the value of stablecoins, I'm paying for my everyday goods in stablecoins. I do think that is going to come and so I think crypto as an asset class has had its moment and it's going to be just a slow growth and sort of a and adoption of the asset class. What I think is still waiting and I think the crypto forward people are aware of it, but the average, average consumer is not is how much stable coins are going to become a form of money that we use behind the scenes.

Tony Clark: That's really interesting. You say it's an iPhone moment and this is a bit of a spoiler alert for a future episode. So I'VE had Solana on this show but I'm talking to them again in a week or two's time and about their mobile and you'll know about this but they've got something called Seeker which is a crypto uh, wallet inside, inside a phone and they sent me one last week so I've been playing with that and so we're going to be talking about that device. Um, so anyway, that's a, for the audience, keep an eye out for that episode in a few weeks time. But um, once we get, get into figuring out what it means to have crypto native phone in your pocket. But maybe that's part of the iPhone moment to come.

Keith Groth: Right.

Tony Clark: Although it's an Android phone, I think

Keith Groth: it will be because uh. Well, yeah, exactly. It could be, it could be either of those. But I mean in some ways the, the technology is already there in that you have a secure element on your phone. We're all paying with tokenized credit cards or tokenized debit cards a day. When we tap to pay the thing that's going to change is just much lower cost, instant Rails. But like the underlying technology is already there in our pockets. So uh, I think that's going to come and it's going to be really interesting and then we'll probably get to this a bit later. But the overlap of stablecoins and crypto wallets and AI agents and the way agents will pay each other in agentic commerce I think is something that is extremely early but could be a massive mover as well in the next five to 10 years.

Tony Clark: Yeah, so we talked a little bit about consumer side and a bit about institutional adoption and the obvious one is payments, you know, and the exchange function that Coinbase provides for that. But the extension is some of the other things that you're offering to the market and the wider financial rails for the market and you touched on it actually. Custody, lending, institutional settlement, there's all sorts of things you can do on chain. Where are Coinbase leaning in and investing? And which bits of that infrastructure are you sort of going after versus the bits you're happy to leave to the uh, incumbent Trad 5 firms?

Keith Groth: Yeah, so I guess there's a few places. So one on the consumer side we want to be essentially the everything exchange. So we're adding more and more asset classes, traditional savings accounts, traditional equities. We also just launched Bitcoin and Ethereum borrowing on our platform in the UK just this week. Um, so we're trying to bring some more of these financial use cases to demonstrate to people the value of crypto of oh, you can instantly access Lombard Lending that used to be reserved just for super high net worth people with private bankers. And you had to send a bunch of documents and sign contracts. Now you can do it in less than a minute with a smart contract using your Bitcoin and just get cash against it instantly. Those are the type of things that we want to bring more and more of those use cases to the consumer side. On the institutional side we want to be the prime broker of choice and basically white label our trading infrastructure so trading desks and other large institutions can manage that. That's where the custody lending fiat on, off ramp rails, um, really deep high security crypto rail stand. And this is why we've been chosen to be the custodian for most of the bitcoin and Ethereum ETFs. I think something like 10 of the 11 or 8 of the 11 are ones are backed by Coinbase underneath the hood. And then we also on the on chain side we want to scale our own L2 to make sure it's really performant, which is called Base. We offer our own self hosted wallet, the base app. We want to make sure that for the real defi natives, um, and especially in developing markets and places where Coinbase isn't yet, they can access our services. And so we're sort of working on all of those aspects. And then stablecoins are the payment rail underneath all of that. These are things that are also going to be built by large financial institutions. So I think the exciting thing about this is it's not going to be just Coinbase. This whole ecosystem is going to be competing for this and I think it's going to scale the adoption quite dramatically.

Tony Clark: Yeah, just for the audience, L2 level two chain. Do you want to expand on that?

Keith Groth: Yeah, yeah, yeah. Let me explain. So Ethereum, um, is some people, you probably heard the word but may not understand what it is. Ethereum is a blockchain. It is one of the layer one blockchain. So there's nothing beneath that essentially. Um, and it operates as ah, the world computer blockchain. So while Bitcoin is about transfer of asset value, Ethereum is where you do smart contracts. You can essentially write code that is executed on chain and there are now what's called layer twos which are different, like more performant, faster decision making layers on top of the Ethereum L1 and that's what base is. So we essentially have built our own layer on top of Ethereum that runs Much higher throughput, much higher transactions per second, but is ultimately secured by the decentralized network on Ethereum. So it is truly decentralized. It just moves faster and is cheaper to operate on. And there are other L2s as well. So when someone says L2 in crypto, that's what they're talking about is a layer on top of Ethereum, um, that is built to be faster and more performant.

Tony Clark: And I looked into this briefly, if I'm right, on Ethereum base layer, I shouldn't use the word base because that's what your L2 is called. But on Ethereum itself it could take minutes to settle a block. But you're kind of batching lots of things up on, on your, on base and processes them much faster and then posting them back to Ethereum as, as a block. I mean uh, maybe that description uh, is a little off, but uh, broadly I think that's um, how you're doing this, right?

Keith Groth: Yeah, exactly. I mean it's called a roll up but that's exactly what it is. Like we're, we're basically batching our own processes, processing them faster, but then ultimately securing them and moving the value on the underlying Ethereum blockchain as well.

Tony Clark: Okay, right. Switching to the UK because you know, you head up the uk, Coinbase has a global business. You touched on new offerings that you've brought to the market in the uk. Just this week at uh, the time of recording, I think this is Friday, I think Monday, you, you released the USDC borrowing offering. But perhaps tell us a bit more about your mission to build the number one financial app in the UK and what the products and services are that Coinbase is investing in bringing to the, to the market here.

Keith Groth: Yeah, 100%. So I, so I, I mentioned the term everything exchange earlier, which is sort of how we're, we're aligning on it internally and externally, which is we want to be a place where anyone can manage all the aspects of their financial life inside of Coinbase. So we started out as a pure crypto exchange. Now we can hold fiat, fiat in different currencies. You have A uh, an FSCS protected savings account that offers three and a half percent AER and so that's the equivalent of 3.5% APY in the US. Again government insured. We now have Bitcoin and Ethereum borrowing. So if you're a long term holder of those assets, you can access USDC by posting it as collateral instantly. We've offered the ability to send and receive all of these aspects and we're building things like you see in the us, traditional equities, debit cards, all of those are coming to our application. And the other thing we launched this week that I'm really excited about is we listed our first GBP denominated stablecoin, which is called tgbp, with our partner tokenized gbp. And so we're also trying to launch more and more stable coins and more and more currencies and get users used to the idea that you can use those to pay for everyday services, to transact faster online, to send money across borders. And so all of this we're packaging together and trying to build for the UK ecosystem. And I think there's a big period of growth ahead because today while 85% of UK consumers have heard of crypto, only 10 to 12% of them actually have bought or hold it. And so you have this massive segment of the market is aware of it, but hasn't gotten into it yet. And I think that's what's going to change over the next 10 years. And this is also why you see lots of other consumer based applications in the UK adding crypto or going into the space because there's a sense of consumer demand is there and we want to be the place that users get used to the service and get comfortable and be the most trusted place to start your crypto journey in the uk.

Tony Clark: Yeah, you guys are moving fast. Right? So when I spoke to your comms team ahead of this interview, the breaking news was the uh, was the USDC borrowing, which I think embargoed till Monday. And my next question was going to be about what your thoughts were on a GBT denominated Stablecoin. And you just told me you just launched it.

Keith Groth: We just launched it. We just launched it yesterday actually. So yeah, I mean we've been shipping like crazy. Uh, this gray hair is here for a reason. We've been keeping ourselves busy. Um, but yeah, I mean both of them are exciting products in different ways. I think the borrow one, uh, and I think you will start to see this more often again is this is a use case that again was typically only available in ultra high net worth and because of the power of low cost smart contract calculations, we can actually offer it at a reasonable price to everyday consumers, which is great. And then on the GBP side the UK has frankly been behind on stablecoins and so our goal is to really try and help it catch up. And there's all this regulation coming out now to formalize rules around it. And so we finally are at a place where we can actually start to launch these at scale and make them usable in the UK ecosystem.

Tony Clark: That's brilliant. And you touched on the gap between the UK consumer, who I think 85% know about crypto, but only 10% of, ah, hold any. That adoption roadmap. You know, how are you getting involved in that? Because there's obviously going to be staying the right side of the regulation, but there's awareness and adoption. I'm curious what initiatives Coinbase is, uh, taking to, you know, drive that adoption in the right way.

Keith Groth: Yeah, I think the number one thing is continuing to build trust. And what's happening this year around that, that we're excited about, is the crypto license regime, which is bringing crypto inside of the Financial Service and Markets act regulation. The UK is coming, which means you're going to start to have fully licensed crypto platforms. We previously have already been FCA registered under the money laundering regulations alongside some other exchanges, but this is going to be a different level of license for crypto. And so then we can actually go out and show users, hey, we're trusted. I think users trust the FCA and they trust the FCA to be a strong regulator overseeing players like Coinbase. And so we're excited to go through that process and have that license. You know, as we go into next year, when it kicks off, it comes into force October of 2027. So basically the next 12 months, all the big firms are going to be going through this process. Then the second thing is just building awareness and that is, again, just repeated action, being very clear, having a great user experience that also educates users along their journey. What is each of these different cryptos usable for? How do you actually use it in your everyday life? And I think that's one where it's. You just have to have great designers, great user experience designers and build a product that just develops trust over time. And that's something we spend a ton of time on, being a simple place to get started. But as you go deeper in your crypto journey, we have more and more features, more and more advanced offerings that you can go into as we educate a user through their life cycle. So it's a long journey. These things don't happen overnight. But I think that's the type of thing where you see, you know, eventually demand become really big. And I believe in the long run, consumers are going to have crypto wallets in the same way. They all have debit cards and credit cards. I think it's going to have that level of penetration over the next 10 to 15 years.

Tony Clark: Yeah. And can you just, uh, expand on the FCA regulation point? I understand there's a consultation. There has been a consultation and I, uh, thought maybe that was still being consulted on, but I think you were a bit more clearer then around, around dates and approvals. So what is that coming?

Keith Groth: So Parliament has laid the legislation. So the legislation has been set and now the FCA is putting that legislation into force with this licensing program. They've been doing a ton of consultations about what are the fine edges around some aspects of, of the regulation. But they're going to open up an application window in September of this year for firms to start applying and then the regulation will come into force in October of next year. And so we already have a very good sense of that. While the final rules have not been fully released, we have a good sense of what they're going to be. And so you can start to build and prepare and get your company ready to go through that process. But essentially by October of next year you will have fully licensed crypto players that are licensed in the same way as large financial institutions and have that level of support from the FCA in terms of their oversight.

Tony Clark: That's a good link. I was going to ask you about competitors and rest of market. So the sort of firms that are lining up to be licensed are the ones that you compete with in the market. You know, there's, you mentioned Robinhood earlier, but there's Revolut and others bolting on the crypto services. You know, how do you stand out and how you, how do you plan to, to succeed in a really quite complicated and competitive marketplace, uh, where everyone's sort of pushing to uh, get their. They're part of the wallet share here. Yeah.

Keith Groth: 100. I do think this market will get more competitive. And the way I think about it is two things. One is we are today the most trusted crypto exchange. When we do surveys, we've built that very carefully with users over many years. We need to continue to hold on to that and build on that. We want to be a place where, when you think about crypto, you think about Coinbase and you think about that as a trusted place. We want to then add more traditional finance use cases so that we can also cover more of a user's financial life, just like some of the more traditional fintechs are adding in crypto, that's just going to be, I think, table stakes features that every great player is going to have to have. But then the third thing is for companies that are trying to build crypto, I want to be the underlying provider if they need those services. We've built such amazing infrastructure over the years and I truly think Coinbase's institutional business and developer business is the best thing to build white label crypto services on. So even if I'm competing on one side for consumers, I would love to be a provider to players on the other side that are trying to build these services. Um, in the same way that you see Google and Apple competing on the phone side but providing services for each other, I think the market has matured to that point where we are going to compete with institutions on many sides, but we're also going to be partners with them on other sides. Just like we use their services for Fiat Rails, they might use us for crypto Rails and we might be battling on the brand side for share of Wallet. I think that's just the reality of where the market is heading.

Tony Clark: Yeah. And how does that work, that latter point? So I've spoken to embedded payments firms, embedded investment firms. There's sort of embedded everything in today's market. But are you talking about embedding Coinbase tech in client infrastructure who then obviously face off to end customer in the same sense that we do talk about things like embedded banking? Or is it, or is this as a bit different?

Keith Groth: 100%. Uh, think about it this way, right? Like when BlackRock offers a Bitcoin ETF, there actually has to be someone buying and holding the underlying bitcoin. That's where Coinbase comes in. If a player wants to offer the ability to buy and sell Ethereum in their application, they need to have the actual underlying connection to the blockchain ability to manage that service. Coinbase offers that on a provider basis. So it might look like you're buying and selling crypto inside of, you know, choose your Neobank, but under the hood they might be using actually our infrastructure to manage that. Um, and so it is very similar to the embedded banking use case. And that comes from again, ten plus years of us having to build this infrastructure from ourself. And I think we truly have the most mature infrastructure in the space. And so we can now start to externalize that and sell it to other individuals as well to other firms.

Tony Clark: How big a part of your business is the embedded side?

Keith Groth: It's big and growing. So I can't share the specifics, but it's in our annual reports. But um, this is a massive focus for us, our institutional business under Greg Tussar is really scaling well and our crypto as a service business, which is what we call it, is one of our biggest focus areas for this year alongside stablecoin payments.

Tony Clark: Yeah, and I touched on this in my intro. The base, the L2 offering has also exploded. I think it's in the top three in terms of L2 uh, platforms out there. Can you, does that cross over with the embedded banking offering? And can you tell us a bit more about Base and the strategy behind that and why you think that that's grown in adoption so fast?

Keith Groth: Yeah, I think it's a similar story to sort of what I shared in the sense that we needed a more performant layer on top of Ethereum for our own use cases. We wanted to have more transactions per second, better developer services. So we basically built the tools that we needed. But we decentralized it so anyone can build on it. And now base has one of the highest developer activities of any blockchain. It has one of the highest TVLs or total value locked on the blockchain of any other L2s and is up there in like the top five blockchains, period. And so I think you've just seen this adoption grow again because we've built the tools that we needed and then made them available for everyone else as we decentralized the blockchain. And so um, is it going to be used inside of applications in the same way as our like crypto as a service infrastructure? Maybe not initially because is much more on chain native, but it is the place where crypto apps, self hosted wallets, the more defi projects they're all building on base because it just has a great set of tools. It's very performant blockchain. It's up there with Solana as the most developer activity and the most tbl. So I think those two are competing on chain and partnering with each other on chain to provide the best experience to developers that are really building those defi services.

Tony Clark: Yeah. Okay. Every time I talk to a uh, blockchain firm, um, I've. Well so far I've asked where's hq? And I always get the answer is that we don't have one. So you would truly. It's true.

Keith Groth: I can change that. I can change that. We, we have an hq. Our HQ is in San Francisco. That's where Coinbase was started. We also have massive offices in New York, London, Singapore, Australia, Dubai, now Amsterdam. So you know we're a global company but we're headquartered out of uh, the Bay Area. And that was where we were started as well, we were a Silicon Valley firm initially.

Tony Clark: Uh, so you are bucking the trend then, on a truly decentralized fund.

Keith Groth: This comes back to you, actually, to one of your original questions, like, what served Coinbase? Well, I think unlike many crypto firms, we went initially on being heavy in compliance, heavy in licensing, trying to partner with government and do things by the book. And now that crypto is becoming regulated, it's finally paying dividends after many years of painful regulatory discussions and working with regulators. I think that strategy was the right strategy in the long run to be that trusted partner to financial services. So I think it's been part of the plan. But, yes, we. We have a headquarters, we are auditable. We're a public company in the S&P 500. It's something that we're. We're proud to, uh, have that approach because we know not every crypto firm does.

Tony Clark: Yeah. And in a sector that's sort of famous for being quirky, pushing the envelope a bit, um, you are. You're still somewhat creative. Right. I came across. There was an ad that you ran for the Super Bowl. I think it was in 22, and I don't know whether folks in the audience would have seen this, but I looked it up. It was a. It was a QR code that literally, it was like an old game of Pong, and it was just sort of moving around the screen for. For a whole minute. And apparently that. That crashed the app, and you had millions of people just scanning straight into that QR code. What's the. What's. What's the sort of most unexpected, surreal, fun fact thing that's happened, um, for you, Keith, while we've been working with Coinbase?

Keith Groth: Yeah, it's, um. I mean, that ad, I think, is such a great. We have an amazing marketing team and branding team, and they really try and think outside the box. I think we have one of the most unique brand positionings out there in this sense, and it's been great to see some of these super bowl ads for myself. Probably the most surreal one is we partner with aston Martin in F1, and last year we had a, uh, it was either 5 meter or 10 meter tall F1 helmet, driving around London and then parked in Covent Garden. So I went down and stood next to this, you know, this thing, the tower is over me, uh, driver's helmet. That was a pretty surreal moment, I would say. And then the other one is we actually ran another super bowl ad this year that was just a karaoke song of the Backstreet Boys, which I'm from the era where they were like the big boy band when I was growing up. And so it was kind of surreal to sit on, watch TV and be like, oh, I, I know this song and this is a Coinbase ad, you know, coming out.

Tony Clark: How did it go?

Keith Groth: It went very well. It was one of the like highest rated ads for the entire Super Bowl.

Tony Clark: I meant the song, but maybe I wasn't gonna get you to sing on the London.

Keith Groth: The song was I wanted that Way by, by Backstreet Boys. I'm not gonna sing it, but, uh, everyone can look it up and I'm sure you'd recognize it.

Tony Clark: That'd be a first for this show.

Keith Groth: Break out into song.

Tony Clark: We do see, you know, London as a stage for some of these creative marketing initiatives. And I can't remember which firm it was. They sort of floated some enormous statue up the Thames under Tower Bridge as well. I didn't know about the racing helmet driving around London, but it, it's not the first time. But they get noticed.

Keith Groth: They do get noticed. I mean, London is such a great city in that sense. I guess it's why I love being here. And I think it's the, you know, our most important market outside of the US and our most important office outside the US In London. Because I think it is this place where you have an interesting mix of culture, uh, tech, financial services, a huge history. I mean, it's a great city for those type of things, right?

Tony Clark: Yeah. And much nicer in the summer, which is sort of. We're just coming into the good weather.

Keith Groth: Exactly.

Tony Clark: Okay, so let's talk a little bit more forward looking. If, if you and I were having this conversation again in 27, so in a year's time, you know, what do you think are the things that perhaps have become boringly mainstream, that today are definitely not in the mainstream and uh, um, perhaps feel more niche or new right now? What will we have got used to next year that's, uh, only just uh, happening now?

Keith Groth: I think you'll start to see equities and crypto next to each other in almost every large financial application. And you'll start to see users just thinking about their asset and portfolio management across both of those interchangeably. So I think you're already seeing this to some extent with players like Revolute. You're going to see it uh, more with players like Coinbase, and I think lots of others that are either starting from traditional brokerage will be adding crypto, or starting from crypto will be adding traditional brokerage because those are the two most in demand asset classes, particularly from Gen Z and Millennials. And so I just think that is just going to become normal. You just think of it as like, oh, this is another asset class I'm managing, just like bonds. I, um, think that's going to happen. The one that's going to take a little bit longer than 27 in my opinion, but it's going to be more meaningful is the tokenization of capital markets. And that, uh, I sort of mentioned this at the beginning, but again that's going to be underlying blockchains being used to manage risk and actually do 24, 7, 365 trading of some of these assets where it will bring all the benefits of efficiency, risk management, automated services to more traditional asset classes like equities, bonds. And that is already starting to be built under the surface. It's going to take a couple of years, I think, to rise up through and be used by consumers. But that's going to be one that I think has a decade of Runway ahead and is going to have really meaningful changes to the way we manage financial services under the hood.

Tony Clark: Yeah. And I think that's been talked about and indeed worked on for a decade. Right. There's been various, uh, bond issuances on chain. Well, actually, was it really on chain or did the value move somewhere else? And there've been lots of experiments and initiatives along the way. And maybe it's to your analogy, there is the iPhone moment coming where sort of you don't realize at the time that plus 10 years, this has all become the, you know, the default and the normal. But you didn't see it creeping up on you.

Keith Groth: And the thing that's changing now is while people have been building that, regulators are now caught up and there's actual like licensing and clear rules around and they're coming more and more. So you're going to see this come from the sec, come from the, uh, FCA and Bank of England, where you can tokenize stocks and bonds and you can be regulated to do so. And the underlying user has the formal legal claim to those assets when they hold the tokens. We're heading to that world. So that's what's going to be different here is like regulation has caught up with this space and then it opens it up to large institutions, many of whom m like London Stock Exchange. Large banks in the UK are building this. That's what's different. So you did have this in more of an experimental form 10 years ago. It's coming in a very real way over the next 12 to 24 months.

Tony Clark: Really interesting. And you touched on this earlier so I should ask.

Keith Groth: Ah.

Tony Clark: And we got to 34 minutes in a conversation without talking about AI, but AI agent and digital currency crossover. Uh, so how do you see that playing out?

Keith Groth: Yeah, I mean I think if you think of it this way, right, like agents are built to handle cryptographic sign offs with each other. I mean that's how the HTTP protocol works. Like when, when you're on the web you're doing cryptography. And so when we're thinking about agents, there's two things that need to happen. One is there and I, I firmly believe this. We haven't seen it yet, but I, but I do believe this is coming. Agents are going to buy and purchase from each other much more frequently than humans buy and purchase from each other. So if you think about probably like the highest val, highest volume consumer payments, they are probably E commerce. You're going to have agents buying tokens from each other to access different services. Millions of times more volume than you have humans clicking a button to check out on a checkout page, but at very, very small prices. And so you need Rails, that one can handle hundreds of a cent, thousands of a cent as a price, but also handle millions of transactions per second. And so you need new Rails for that. And that's something where you're going to see the use of blockchain, crypto wallet and agents actually start to overlap and we start building some of this with X402 which is built on the HTTP protocol to let agents request and pay using stablecoins. But there are lots of other people building this as well. It's part of the thought, uh, behind some of the work that stripe and other large payment players are providing. And so it's early days but that's where we're heading is agents are going to need to buy services from each other and spinning up a debit card to buy something that's 0.001 cent doesn't make sense. And so we just fundamentally need new Rails for agents. And I do think that the best services because they're built to be Internet native is blockchain, which is built for the Internet.

Tony Clark: Yeah. So the Genti payment Rails are well under development. Really interesting. And is there anything that's being hyped at the moment that you think is just going to go away next year? It's just not really a thing.

Keith Groth: You know it's hard to predict this. Right. Because if you look Back there's been like hype cycles in crypto. There were NFTs which have been pretty quiet now. There were meme coins I think are pretty quiet now. So it's hard to predict what is going to take off and what's going to be just the hype cycle. In the consumer side for me, I come from crypto and I come at it from the financial infrastructure side. Right. Like I was in mobile payments, then open banking, Rails, now blockchain Rails. I care a lot about the adoption of the underlying infrastructure and the value that's going to bring and I try not to focus too much on what's the current hype cycle on the retail side because I think it's very hard to predict that and where it's going to go.

Tony Clark: Yeah, maybe digital asset Treasuries, you know, I mean it's not really being hyped but certainly, um, if you wind back a few months, that was a big thing and, and it's so sensitive obviously the price of the, of the underlying crypto assets and that's not, you know, that's been very unpredictable over uh, the last few months.

Keith Groth: Yeah. And I think also as users again as you can access crypto trading more directly and more and more applications, I think the value of purchasing a company that's a digital asset treasury company will be less because you can just, you know, if you want exposure to Bitcoin, you can just go buy Bitco Coin. Yeah.

Tony Clark: So what's next for Coinbase?

Keith Groth: What's next for Coinbase? We are in the process of getting this crypto license that's a big focus for us and building more and more of these everything exchange products and launching them in as many markets as we can. So we're in a period of product expansion and then bringing that product expansion to Geo expansion more and more markets and doing it in a way that's regulated. So you have to get lots of different licenses, work with lots of regulators to launch these things. So that's on one side and on the institutional side it's growing stablecoin payments. I think we are one of the biggest players there. We're one of the largest um, distributors of usdc. We're adding more and more local currency stablecoins. We again just launched one in gbp. We have one Australian dollar, Singapore dollars. And so I think you're going to see more and more stablecoin launches and stablecoins Rails being built into additional services. So those are the two things I'd highlight to people on the sort of Consumer side and the institution side.

Tony Clark: Yeah. And given that, as far as I can see, you launched a borrowing service and uh, um, a sterling stablecoin in the space of a week. Um, then there's probably a lot of, uh, product to be shipped.

Keith Groth: There's a lot of product to be shipped and we're trying to move fast. Yeah, it was a big week this week with both our USDC borrow product and our GBP Stablecoin launching. Um, but I expect there will be more big weeks to come in the rest of the year as well.

Tony Clark: So. And just as we close out, because we'll run out of time in a few minutes, but, uh, from your personal career journey, um, you know, if you were to wind back and say, oh, this is the thing, I really wish I knew this at the start. Is there one thing that you would want to share with the audience? You know, the fintech founders, the fintech leaders out there that, uh, you wish you'd known at the start?

Keith Groth: Yeah, I guess. Ah, maybe

Tony Clark: like these, these will sort

Keith Groth: of blend into each other. But a couple of things come to mind. One is I think you need to go after really big global ideas and there's nothing, there's never been something at the scale of the Internet in human history. And so building financial services at the scale of the Internet from day one and having that ambition, I think is something I would urge founders, and I think what I mean by that to make it tactical is you should figure out, is your problem one for your local neighborhood, your local country, or is this the same problem that people might have all over the world? And are you designing your systems to scale in that way from day one? This is something I've experienced both in companies I've worked in and startups I've backed, where you build your services and they work really well. And then the first time you want to do international expansion or move to a new market, either the use case isn't there or you have to completely redesign your tech stack because you didn't build it to be global from day one. Um, so I think, you know, you need to have that big ambition, but then build it into the way you design your systems early on. It will save you so much headache in the long run. And then the second thing I will say is if you're building in fintech or financial services, figure out compliance early. This is a mistake. I see a lot of startups make where you think about the slick ux, but not the how I'm managing the risk on the back end. How Am I doing all my aml Kyc I think the companies that get that right early can scale so much faster. And so it feels like a pain when you're a small startup, a series A company to build that way. But I think if you do that early, it yields leverage and benefits down the road as you scale where again, you can just move so much faster if you build that into your DNA early as a company. So those are the two things I would say is like dream big. Build your systems to be dream big and make sure that compliance is a foundation from day one.

Tony Clark: Yeah. Strong foundations. And then you can go, you can go at pace from there. Yeah, I've seen lots of examples of that across the market. I think that's a great insight. So we know what you're reading because, because we know you spend your weekends in uh, London's bookshops and we got a couple of recommendations. Anything on your, on your listening list or, or anything uh, you're watching?

Keith Groth: Yeah, I, um, I have queued up for this weekend. I, I love the knowledge product podcast, uh, with Shane Paris where he does like sort of deep dive interviews. That and the acquired podcasts are sort of my two favorite like business learnings and I saw that they just launched one with one of the co founders of OpenAI, Greg Brockman. So I haven't listened to it yet, but that's queued up for me this weekend to hear a deep dive. It's fun to follow the AI ecosystem. I mean it's peak hype cycle right now, but I think it's very interesting and I'm super deep in crypto day to day and I try on the weekends to uh, make sure I'm staying up to date on what's happening in AI as well.

Tony Clark: Yeah, um, um, it's not the first time acquired has been mentioned. I'm a huge fan of that show as well. I think the production quality on that's amazing. And somehow those guys have just got such an engaging dynamic. I can listen to them for hours. And uh, you have to because the episodes are about four hours long.

Keith Groth: Exactly.

Tony Clark: I really like that one.

Keith Groth: And also I think, I think, you know, it's really interesting when you're in company building like, which is where I've spent my career, to hear these real, real deep dives on how like all the crises and ups and downs that companies go through, that I think a lot of people from the outside, you see these massive of companies and you don't, you don't think about the journeys, the times they almost died. You know, all of these things. It's really fun to hear those stories.

Tony Clark: Yeah. And, and in that such a sort of engaging and reflective way and um, when you're in the middle of it, you would never have told the story that way. We've had plenty that roller coaster with my consulting business. Which you won't go into here. But you know, I sometimes say I'll write a book about this sometime or maybe I'll record a podcast about it. But uh, at the time it's, you know, you don't know which way to go. But uh, um, the ability to sort of step back and um, sort of hold a mirror up to sometimes years, years of journey and, and the, and the sort of pivot points along the way is in such a clear way. It's just great storytelling.

Keith Groth: And it's funny you say that because I could go back to your question of like, advice I would offer to founders, I think something that served me well. I can't remember who told me it initially or whether I just, just came to this conclusion over time, but when you think about those moments of crisis, I think something that can really help when you're in those moments because as you say, they don't feel fun when you're going through them and you don't know where you're heading. But I think reminding yourself that this is going to be, you know, one of those career defining, you know, moments and one of these stories I think can make it easier to bear in the moment. And like when I tell people, it's like when you want to, you know, sit at the pub and hear someone's stories, you never want to hear, oh, things were always great and it was like, that's boring. You want to hear about the crisis moments. And so I think reminding yourself when you're going through that, um, of, okay, this is really intense right now, but actually this is going to be an amazing thing to talk about later. Can make it a little bit easier to just roll up your sleeves and get dug in.

Tony Clark: Let me tell you a story about when we nearly died and how we're stronger on the other side. Right. So.

Keith Groth: Yeah, exactly, exactly.

Tony Clark: So, um, if the audience wants to find out more, where to find out more about you or I guess the answer is the Coinbase website for the business.

Keith Groth: Yeah, I mean coinbase.com, check it out or download Coinbase in the App Store. And if you want to learn more about me, I'm, I think one of the only Keith Grosses on LinkedIn or you can find me at KMGrose on X. So would love to engage with folks if they have any questions and I

Tony Clark: think if I'm right. Keith, I saw you on the speaker roster for money 2020. Are you going to be at that show?

Keith Groth: I will be there. I didn't notice you mentioned Ollie. I will be there as well. I'll be@stablecon EMEA. Ah. So um, I'll be out there and hope to talk with some more crypto and fintech folks over the coming months.

Tony Clark: Well, we'll probably see each other because the London FinTech podcast is going to be at Money20 20. We're streaming two shows, two episodes from the show. So um, I'll be there as well. So look forward to that.

Keith Groth: Amazing. Yeah, well look forward to seeing you in person there then. And we can enjoy Summer in Amsterdam.

Tony Clark: Indeed. Indeed. Well look, for now, thank you for coming on the show. Really engaging conversation. I hope the audience got as much from that as I did. And thanks again.

Keith Groth: Thanks Tony. It's great to be here. Appreciate the time. Mhm. It.