Coinbase CEO Calls For Overhaul In RWAs, Payment Rails, And Financial Regulations

• Coinbase CEO Brian Armstrong believes there’s plenty of work that needs to be done to improve the current payment and settlement rails.

Blockchain technology has experienced an exponential increase in adoption over the years. It has been instrumental in bridging traditional finance (TradFi) to the always-online Web3 ecosystem.

Brian Armstrong, CEO of Coinbase, highlighted, though, that there’s still more work to do in updating the financial system. Recently, he identified the areas that still need significant changes.

Tokenized RWAs

Armstrong emphasized that real-world asset (RWA) tokenization is essential for bringing cash, real estate, stocks, bonds, funds, commodities, and other financial products on-chain. It enables instant settlement, fractional ownership, and democratized distribution of value to retail and institutional investors.

To date, the tokenized RWA market has grown into a $673.88 billion industry. The largest contributors in the sector are repurchase agreements (repo) and stablecoins, accounting for $308.67 billion and $304.84 billion in total value, respectively.

The same area of the market enables 24/7 global trading and greater capital efficiency than legacy systems. RWAs bridged on-chain pool global liquidity, making them instantly accessible and opening them to atomic settlements.

Stablecoins and Agentic Payments

Additionally, Armstrong underscored the largely untapped potential of stablecoins. Harnessing it would enable real-time, low-cost cross-border payments.

The Coinbase CEO also sees stablecoins powering up agentic payments, a rising subset of the digital landscape. It reiterates his earlier projection that the agentic economy will eventually surpass the human economy when its operations go full swing.

Moreover, Armstrong stated that AI-enabled risk, credit, compliance, and advisory protocols offer more intuitive decision-making. At the same time, they help mitigate fraud risk and broaden access to capital for people.

Innovation-Friendly Regulations

Armstrong claimed regulators must stop insisting on one-size-fits-all standards. Instead, they should focus on a risk-based approach in crafting rules. This kind of flexibility allows for more innovation and competition to prosper.

Likewise, the Coinbase boss recommended expanding access to open protocols. The measure would help reduce intermediaries and promote self-custodial wallets for everyone with a smartphone.

Furthermore, Armstrong urged streamlined rules for capital formation. The low-cost, turnkey approach to raising money would encourage the formation of more startups.

Finally, Armstrong advocated sound money to promote financial stability. He called it a refuge from inflation when the public loses discipline in fiat money.

Job’s Not Done

Armstrong said there’s a lot of work to be done to get his vision up and running. He also remarked that it will require significant technological innovation and better policy work to get there.

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