Delivered by Alesia Haas, Coinbase Chief Financial Officer
Chairwoman Waters, Ranking Member McHenry and Members of the Committee, good morning and thanks for this chance to testify on digital property and the way forward for finance.
My identify is Alesia Haas and I’m Chief Financial Officer of Coinbase Global Inc. I additionally serve within the position of Chief Executive Officer of our U.S. subsidiary, Coinbase Inc. I joined Coinbase in 2018 after serving as Chief Financial Officer at Sculptor Capital and OneWest Bank, and have over 20 years of expertise within the finance trade.
Today I’d prefer to introduce Coinbase, focus on the evolution of crypto, and spotlight how at this time’s rules might be modified to advance the bipartisan objectives of defending shoppers and selling innovation.
Coinbase’s mission is to extend financial freedom on the earth. We have been based in 2012 with the concept anybody, anyplace, ought to be capable of simply and securely ship and obtain Bitcoin. Over the final 9 years, our services have expanded to satisfy our prospects’ wants within the quickly innovating crypto trade. We have prospects in each state besides Hawaii and, as a remote-first firm, we have now workers in 45 states and the District of Columbia, together with 24 of the 25 states represented by the members of this committee.
We now securely retailer 12% of the world’s crypto throughout greater than 150 asset varieties, we provide prospects the chance to find out about and purchase, promote, ship and obtain greater than 100 property. We additionally supply prospects the chance to spend, borrow, earn and stake on choose property. We serve greater than 73 million prospects globally, together with 10,000 establishments and 185,000 utility builders. Importantly, almost 50% of our transacting prospects are doing one thing apart from shopping for and promoting crypto, which signifies to us that crypto is shifting past its preliminary funding section into the lengthy anticipated utility section.
Since our founding, Coinbase has strived to be probably the most safe, trusted, and legally compliant bridge to the cryptoeconomy. Coinbase is federally registered as a cash companies enterprise with FinCEN, licensed as a cash transmitter in 42 states, holds a “BitLicense’’ and belief constitution from the New York Department of Financial Services, and we’re approved to interact in client lending in 15 states.
We have a sturdy AML/BSA program, and we’re one in all solely two digital asset members of the Department of the Treasury’s Bank Secrecy Act Advisory Group.
In addition to the varied state regulatory regimes, we’re topic to federal oversight from Treasury, the CFTC, SEC, FTC, and CFPB.
Much just like the adoption curve of the Internet within the Nineteen Nineties, we’re seeing dramatic developments in crypto participation. There are greater than 220 million crypto holders globally, and round 16 p.c of Americans have invested in, traded, or used cryptocurrency. Total crypto market capitalization on the finish of Q3 was over $2.0 trillion, up from $800 billion on the finish of 2020.
Coinbase’s platform is powering the cryptoeconomy — a brand new monetary system for the web age — which is a vital infrastructure layer to Web 3.0. Technologies like non-fungible tokens, which we name NFTs, and decentralized utility platforms will paved the way for Web 3.0 to revolutionize the web, very like the web was revolutionized when it went from static content material to a spot for dynamic engagement.
We imagine sound regulation is central to fueling crypto innovation and adoption. That is why we launched our Digital Asset Policy Proposal, which we discuss with as dapp. The dApp assessed the challenges of the present regulatory framework and proposed a 4 pillar resolution.
First, we imagine the federal government ought to regulate digital property below a brand new, complete framework that acknowledges the distinctive technological improvements underpinning digital property.
Second, accountability for this new framework must be assigned to a single federal regulator. This regulator can be charged with establishing a registration course of for intermediaries, which we discuss with as Marketplaces for Digital Assets.
Third, this new framework ought to have three objectives to make sure holders of digital property are empowered and guarded: A) Enhance transparency by means of strong and applicable disclosure necessities. B) Protect towards fraud and market manipulation. And C) Promote effectivity and strengthen market resiliency.
Our fourth and ultimate pillar is to make sure that regulatory options promote interoperability and honest competitors.
In conclusion, Coinbase believes crypto will drive transformational change throughout society in optimistic methods. That is why our mission is to advertise financial freedom all over the world. Disruption at all times challenges the established order, however we imagine sound coverage options can enhance the system for everybody. We applaud Chairwoman Waters, Ranking Member McHenry and the members of this Committee for holding this listening to. Thank you for the chance to debate these necessary points, and I sit up for answering any questions chances are you’ll have.
Opening Testimony: U.S. House Committee on Financial Services was initially revealed in The Coinbase Blog on Medium, the place individuals are persevering with the dialog by highlighting and responding to this story.