Coinbase CEO Brian Armstrong Believes Traditional Banks Launching Own Stablecoins 'Not Necessarily The Best' Path— Pitches USDC As Option
Coinbase Global Inc. (NASDAQ:COIN) CEO Brian Armstrong, on Thursday, touched on the wisdom of traditional banks launching their own stablecoins in light of their foray into the cryptocurrency industry.
What Happened: During the first quarter earnings call, Armstrong was asked about the growing interest of traditional banks in the cryptocurrency industry after regulatory relaxations.
The top executive acknowledged the increased momentum, stating that Coinbase has held talks and forged partnerships with some players.
Armstrong specifically mentioned some institutions wanting to develop their own dollar-pegged stablecoins, an idea with which he differed.
“Our view is that that's not necessarily the best path because we think stablecoins have network effects. You want interoperability with other financial institutions to be able to settle payments and do all kinds of things,” Armstrong said.
He suggested that banks should consider partnering with existing stablecoins like USD Coin (CRYPTO: USDC).
Note that Coinbase has an equity stake in Circle, the issuing company behind USDC. In fact, USDC was launched by Centre, a consortium formed through a joint venture between Circle and Coinbase.
See Also: Bitcoin Breaks $100,000, Ethereum, XRP, Dogecoin Roar 10% Higher
Why It Matters: Barriers to TradFi’s entry into the space have been eased, with directives preventing them from custodying cryptocurrencies getting repealed after President Donald Trump took over.
This development follows Coinbase’s first-quarter earnings report, where the company missed revenue and EPS expectations.
Before the earnings, Coinbase announced the acquisition of Deribit, a crypto options exchange, for approximately $2.9 billion, marking the firm’s largest push into the global crypto derivatives market.
Price Action: Shares of Coinbase fell 2.67% in after-hours trading after closing 5.06% higher at $206.50 during Tuesday's regular trading session, according to data from Benzinga Pro.
As of this writing, the stock ranked high on growth, a measure of a stock's combined historical expansion in earnings and revenue across multiple periods. To check how other cryptocurrency-related stocks stack up against COIN, visit Benzinga Edge Stock Rankings.
Photo Courtesy: David Esser On Shutterstock.com
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.