Coinbase CEO Brian Armstrong Weighs in on Traditional Banks Launching Their Own Stablecoins

During the first quarter earnings call, Armstrong was asked about the growing interest of traditional banks in the cryptocurrency industry after regulatory relaxations.

Coinbase Global Inc (NASDAQ:COIN) CEO Brian Armstrong on Thursday shared his thoughts on traditional banks launching their own stablecoins.

What Happened: During the first quarter earnings call, Armstrong was asked about the growing interest of traditional banks in the cryptocurrency industry following regulatory relaxations.

The top executive recognized the increased momentum, stating that Coinbase had engaged in talks and partnerships with some players.

"We've certainly seen some institutions come to us and say, 'Hey, we want to create our own dollar-pegged stablecoin.' And our view is that that's not necessarily the best path because we think stablecoins have network effects. You want interoperability with other financial institutions to be able to settle payments and do all kinds of things," Armstrong said.

Instead, he suggested that banks should consider partnering with existing stablecoins like USD Coin (USDC).

Note that Coinbase has an equity stake in Circle, the issuing company behind USDC. Also, USDC was launched by Centre, a consortium through a joint venture between Circle and Coinbase.

Top executives from Coinbase and Circle speak at the USDC launch in 2020

Credit: Coinbase

Barriers to TradFi’s entry into the space were lowered when directives preventing them from custodying cryptocurrencies were repealed after President Donald Trump took over. This move ultimately led to the creation of USDC.

This development follows Coinbase’s first-quarter earnings report, where the company missed revenue and EPS expectations. The report also highlighted a 66% decrease in trading volume from the previous quarter.

Before the earnings, Coinbase announced the acquisition of Deribit, a crypto options exchange, for approximately $2.9 billion, marking the firm’s largest push into the global crypto derivatives market.

See Also: Bitcoin Price Today: BTC Surpasses $100K, But Is It Really Above Key Level?

According to Benzinga Pro data, shares of Coinbase fell by 2.67% in after-hours trading, following a 5.06% increase during Tuesday’s regular trading session to reach $206.50. As of this writing, the stock ranked high on growth, a measure of a stock’s combined historical expansion in earnings and revenue across multiple periods. To check how other cryptocurrency-related stocks stack up against COIN, visit Benzinga Edge Stock Rankings.

Photo Courtesy: David Esser On Shutterstock.com

This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.