Chairwoman Waters, Ranking Member McHenry and Members of the Committee, good morning and thank you for this opportunity to testify on digital assets and the future of finance.
My name is Alesia Haas and I am Chief Financial Officer of Coinbase Global Inc. I also serve in the role 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 experience in the finance industry.
Today I’d like to introduce Coinbase, discuss the evolution of crypto, and highlight how today’s regulations could be changed to advance the bipartisan goals of protecting consumers and promoting innovation.
Coinbase’s mission is to increase economic freedom in the world. We were founded in 2012 with the idea that anyone, anywhere, should be able to easily and securely send and receive Bitcoin. Over the last nine years, our products and services have expanded to meet our customers’ needs in the rapidly innovating crypto industry. We have customers in every state except Hawaii and, as a remote-first company, we have employees in 45 states and the District of Columbia, including 24 of the 25 states represented by the members of this committee.
We now securely store 12% of the world’s crypto across more than 150 asset types, we offer customers the opportunity to learn about and buy, sell, send and receive more than 100 assets. We also offer customers the opportunity to spend, borrow, earn and stake on select assets. We serve more than 73 million customers globally, including 10,000 institutions and 185,000 application developers. Importantly, nearly 50% of our transacting customers are doing something other than buying and selling crypto, which indicates to us that crypto is moving beyond its initial investment phase into the long expected utility phase.
Since our founding, Coinbase has strived to be the most secure, trusted, and legally compliant bridge to the cryptoeconomy. Coinbase is federally registered as a money services business with FinCEN, licensed as a money transmitter in 42 states, holds a “BitLicense’’ and trust charter from the New York Department of Financial Services, and we are authorized to engage in consumer lending in 15 states.
We have a robust AML/BSA program, and we are one of only two digital asset members of the Department of the Treasury’s Bank Secrecy Act Advisory Group.
In addition to the various state regulatory regimes, we are subject to federal oversight from Treasury, the CFTC, SEC, FTC, and CFPB.
Much like the adoption curve of the Internet in the 1990s, we are seeing dramatic advancements in crypto participation. There are more than 220 million crypto holders globally, and around 16 percent of Americans have invested in, traded, or used cryptocurrency. Total crypto market capitalization at the end of Q3 was over $2.0 trillion, up from $800 billion at the end of 2020.
Coinbase’s platform is powering the cryptoeconomy — a new financial system for the internet age — which is a critical infrastructure layer to Web 3.0. Technologies like non-fungible tokens, which we call NFTs, and decentralized application platforms will lead the way for Web 3.0 to revolutionize the internet, much like the internet was revolutionized when it went from static content to a place for dynamic engagement.
We believe sound regulation is central to fueling crypto innovation and adoption. That is why we introduced our Digital Asset Policy Proposal, which we refer to as dapp. The dApp assessed the challenges of the existing regulatory framework and proposed a four pillar solution.
First, we believe the government should regulate digital assets under a new, comprehensive framework that recognizes the unique technological innovations underpinning digital assets.
Second, responsibility for this new framework should be assigned to a single federal regulator. This regulator would be charged with establishing a registration process for intermediaries, which we refer to as Marketplaces for Digital Assets.
Third, this new framework should have three goals to ensure holders of digital assets are empowered and protected: A) Enhance transparency through robust and appropriate disclosure requirements. B) Protect against fraud and market manipulation. And C) Promote efficiency and strengthen market resiliency.
Our fourth and final pillar is to ensure that regulatory solutions promote interoperability and fair competition.
In conclusion, Coinbase believes crypto will drive transformational change across society in positive ways. That is why our mission is to promote economic freedom around the world. Disruption always challenges the status quo, but we believe sound policy solutions can improve the system for everyone. We applaud Chairwoman Waters, Ranking Member McHenry and the members of this Committee for holding this hearing. Thank you for the opportunity to discuss these important issues, and I look forward to answering any questions you may have.
Nov 29, 2023,
3min read time
Nov 28, 2023