WEBVTT - Coinbase Chief Policy Officer Faryar Shirzad Talks Crypto Regulation

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<v Speaker 1>Also in DC this week, Coinbase urging US banking regulators

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<v Speaker 1>to clarify or amend their positions in order to allow

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<v Speaker 1>banks to offer custody and trading execution services for crypto.

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<v Speaker 1>A Senate committee is set to hold a hearing tomorrow

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<v Speaker 1>on what's referred to as debanking. Coinbase chief policy officer

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<v Speaker 1>Fijar Chizade joins us now from a Brussels fire ore.

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<v Speaker 1>Good to see you again, Thanks so much for joining

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<v Speaker 1>us on at Bloomberg Crypto. We're going to talk about

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<v Speaker 1>what's happening in Washington, d C. In just a minute,

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<v Speaker 1>but I do want to get your thoughts on how

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<v Speaker 1>coinbase thinks about listing different assets, really in the context

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<v Speaker 1>of what we learned from President Trump just ahead of

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<v Speaker 1>his inauguration with the launch of his Trump Mean coin.

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<v Speaker 1>Is this something that coinbase would list. Is this something

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<v Speaker 1>that falls into the category of listing on coinbase, Like,

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<v Speaker 1>just give us your thinking around this.

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<v Speaker 2>Well, we have a very rigorous process by which we

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<v Speaker 2>evaluate tokens, and in fact, the folks that do this

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<v Speaker 2>are very much walled off from the rest of us

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<v Speaker 2>in the company. Just to make sure that there's integrity

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<v Speaker 2>to the process. There are no leaks, and that they

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<v Speaker 2>apply the standards that we use rigorously in each token

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<v Speaker 2>that they look at. So out of the thousands and

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<v Speaker 2>thousands of tokens that are out there, they're about two

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<v Speaker 2>hundred and forty that we list on our US platform,

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<v Speaker 2>and we evaluate each token to make sure it's not

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<v Speaker 2>a security, to make sure it's CyberSecure, and make sure

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<v Speaker 2>that there's not a scam underlying it. And that's the

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<v Speaker 2>process that we apply to the trump coin, which we

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<v Speaker 2>do list on our platform, and the decision the list

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<v Speaker 2>is really very much a reflection of what we think

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<v Speaker 2>the market demand may be and whether the token can

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<v Speaker 2>meet the standards that we've set, And so we don't

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<v Speaker 2>comment about individual tokens, you know, we're asked agnostic, but

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<v Speaker 2>our process is rigorous and we feel good about where

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<v Speaker 2>the decisions we make.

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<v Speaker 1>When we did see that coin released, we did see

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<v Speaker 1>some reporting about some concern about folks in the crypto

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<v Speaker 1>industry worrying that it was a distraction or worrying that

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<v Speaker 1>it would hurt the legitimacy of some of the lobbying

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<v Speaker 1>or at least some of the hopes of what would

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<v Speaker 1>be achieved during the Trump administration when it came to

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<v Speaker 1>this space, How do you look at it?

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<v Speaker 2>I think every token has a story behind it, and

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<v Speaker 2>some of the stories are more interesting than the others.

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<v Speaker 2>People have views one way or the other. We try

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<v Speaker 2>not to get into the kind of the backstory of

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<v Speaker 2>any of the tokens. What we try to look at

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<v Speaker 2>as those standards that I talk about, is it CyberSecure?

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<v Speaker 2>Is there something about it that is potentially reflective of

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<v Speaker 2>some sort of scam? Is it a security? And we

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<v Speaker 2>applied those standards pretty dispassionately and carefully, and so there's

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<v Speaker 2>a lot of feelings that people have about individual tokens.

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<v Speaker 2>People have views about the Trump token. Our view is

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<v Speaker 2>that there's a demand for it. It meets our listening standards,

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<v Speaker 2>and it's available for our customers if they want to

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<v Speaker 2>access it through our platform.

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<v Speaker 3>Well, for ya, let's switch gears here and let's talk

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<v Speaker 3>about what's happening on the Hill tomorrow, because the Senate Banking, Housing,

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<v Speaker 3>and Urban Affairs Committee is holding a hearing that many

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<v Speaker 3>are calling a d banking hearing, and you actually sent

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<v Speaker 3>a letter urging US banking regulators to clarify or amend

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<v Speaker 3>their positions to allow banks to offer custody and trading

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<v Speaker 3>execution services for cryptocurrencies. Typically banks haven't really been able

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<v Speaker 3>to play in that sandbox, and I thought that was

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<v Speaker 3>interesting given that, you know, Coinbase obviously offers custody, that's

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<v Speaker 3>part of your business, and particularly when it comes to

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<v Speaker 3>a lot of these spot bitcoin ETFs, Coinbase provides custody.

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<v Speaker 3>Do you see a future in which coinbase is competing

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<v Speaker 3>with the banks for custody business? Oh?

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<v Speaker 2>Absolutely.

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<v Speaker 3>You know.

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<v Speaker 2>Our goal coinbas is to promote economic freedom, and our

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<v Speaker 2>goal ultimately in terms of participation in the crypto economies

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<v Speaker 2>is to bring a billion people on chain and that's

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<v Speaker 2>only going to happen if we have a broad ecosystem

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<v Speaker 2>of partners who are ready to serve as that demand.

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<v Speaker 2>And so we welcome competition, and we think banks are

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<v Speaker 2>critical part of the ecosystem, and so we actually do

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<v Speaker 2>a fair amount of lobby just to make sure their

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<v Speaker 2>status ability to engage in cry activity is clear. Now,

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<v Speaker 2>the backstory on why we wrote this letter is that

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<v Speaker 2>there was an effort under the previous administration over the

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<v Speaker 2>course of the last three years to essentially withhold banking

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<v Speaker 2>services from crypto companies and individuals. So it happened to

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<v Speaker 2>many of the larger companies, but it also happened to

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<v Speaker 2>just individuals who were involved in crypto one way or

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<v Speaker 2>the other and couldn't get a mortgage, or couldn't get

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<v Speaker 2>an auto loan, or found their bank accounts closed. And

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<v Speaker 2>I think what the two committees are going to do

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<v Speaker 2>this week, both the Senate Banking Committee and the House

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<v Speaker 2>Financial Services Committee, is to try to unearth as much

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<v Speaker 2>information as they can about what exactly happened. And for

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<v Speaker 2>our part, we've done two big important things. One is

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<v Speaker 2>we've had ongoing litigation with the FDIC to have them

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<v Speaker 2>essentially release the documents that were the basis where behind

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<v Speaker 2>the curtain they were pressuring banks to stop crypto activity.

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<v Speaker 2>And then the letter that we issued yesterday that you mentioned,

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<v Speaker 2>which is from three of the top banking law firms

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<v Speaker 2>in the country, that clarifies that there's no legal basis

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<v Speaker 2>for the bank regulators to have pushed the banks to

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<v Speaker 2>debank the sector. And I think those two things are

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<v Speaker 2>really important for the committees and for the administration, and

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<v Speaker 2>so we're pleased to be able to have gotten those out.

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<v Speaker 1>Farrir, you and I have not had a chance to connect.

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<v Speaker 1>Since David Sachs was announced as the Crypto and ais Are,

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<v Speaker 1>he was widely seen and applauded by many within the

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<v Speaker 1>industry because you would be seen as this bridge to

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<v Speaker 1>folks like yourself who've been in the industry for years.

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<v Speaker 1>Can you give us an idea if you have of

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<v Speaker 1>any conversations that you've had with David Sachs thus far

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<v Speaker 1>as he served as the cryptos.

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<v Speaker 2>Are, Well, I'll say a couple of things. I mean,

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<v Speaker 2>I worked in the White House in a previous administration

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<v Speaker 2>in a similar role involving international economics. And having a

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<v Speaker 2>point person who has the backing of the President, whose

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<v Speaker 2>job it is to make sure that the president's vision

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<v Speaker 2>on in a particular sector or area gets done is

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<v Speaker 2>a huge thing. And having a guy like David with

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<v Speaker 2>his talents as the Crypto and ais are is amazing

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<v Speaker 2>for the industry, but it's amazing for the American people.

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<v Speaker 2>It'll ensure that on these two cutting edge technologies, the

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<v Speaker 2>US will be in a leadership position. We've had a

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<v Speaker 2>chance to talk to to David and to his team,

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<v Speaker 2>and I think he said to us what he has

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<v Speaker 2>said publicly, and I imagine what he's going to say

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<v Speaker 2>in a short bit, he's got a mandate from the

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<v Speaker 2>President to move and to move quickly. He's got good

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<v Speaker 2>partnerships with the committees and the chairs of the relevant

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<v Speaker 2>committees to get the work done, and we're really really

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<v Speaker 2>pleased to do our part to try to help make

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<v Speaker 2>that happen.

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<v Speaker 3>Well. We are looking forward to David Sachs this afternoon speaking,

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<v Speaker 3>But for before we let you go, I do want

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<v Speaker 3>to talk about the SEC, and I want to turn

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<v Speaker 3>the clock back to June twenty twenty three, when the SEC,

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<v Speaker 3>of course soued coin based alleging securities rules violations, and

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<v Speaker 3>I'm curious what the conversation has been like, whether or

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<v Speaker 3>not you're in talks with the SEC to possibly end

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<v Speaker 3>that lawsuit.

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<v Speaker 2>Can't comment on anything relating to our specific lawsuit, but

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<v Speaker 2>what I would say is we've had a chance to

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<v Speaker 2>talk to the new leadership of many of the agencies,

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<v Speaker 2>and in particular the SEC. I think the acting chair

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<v Speaker 2>and Hester Purse, the other Republican Commissioner, I think are

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<v Speaker 2>very much focused on a process to heal the agency.

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<v Speaker 2>What we've had over the last four years is a

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<v Speaker 2>really abnormal situation where you've got an agency that's refused

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<v Speaker 2>to engage in dialogue with stakeholders in the public, refuse

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<v Speaker 2>to provide clarity or answer simple questions, and I think

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<v Speaker 2>the first order of business, from what I understand from them,

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<v Speaker 2>is to just create a much more responsive and transparent

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<v Speaker 2>process where people can come in, have their stay, get

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<v Speaker 2>a fair hearing, and there be a process that ultimately

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<v Speaker 2>leads in policy outcomes. So we're very, very excited that

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<v Speaker 2>we're going to be able to have kind of the

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<v Speaker 2>normal ability to petition our government like everybody else should

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<v Speaker 2>be able to on our system. And I think you'll

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<v Speaker 2>see some good work, including the task force that they've

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<v Speaker 2>formed under hester person, and I think there'll be more

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<v Speaker 2>announcements coming soon.

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<v Speaker 3>All Right, Well, that's a good place to leave.

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<v Speaker 2>It.

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<v Speaker 3>Really great to get some time with you. That is quinbased,

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<v Speaker 3>Chief policy officer forr Sharzad