Brian Armstrong: prediction

Transcript context

…Now, the sector that Coinbase works in, in the longer run, what will the regulation of that sector look like? Will you be regulated like clearinghouses, like banks, like commodity brokerages? How is that going to be? Well, of course, crypto is really touching many different industries, and they’ll each be regulated a little bit differently. There will be custodians for crypto that are regulated like trust companies or banks, and there will be brokerages for crypto that are regulated like brokerages. There will be exchanges that need to have an ETS license. There’ll be, even, payments or remittance companies. Also, by the way, there’ll be some that are just not regulated like traditional financial services. They’re just software companies. For instance, if you’re creating what’s called a self-hosted wallet, which means you, the company, never take possession of customer funds, but you’re just enabling people to store their own crypto and use it — those, I think, will be regulated more like software companies, which allows them to move quicker and launch in every country on day one, and a lot of benefits like that. Crypto is really touching many different industries, and they’ll each be regulated differently. Should those wallets themselves then be regulated like banks and, say, forced to have capital requirements? Because I could hold the wallet. I could make loans. I could do something that could be a bit like taking deposits, I could be transforming relatively illiquid assets into fairly liquid demand liabilities, and we recreate the problem of runs. What should regulators do about that, if anything?…

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