Despite launching into an arduous and likely expensive tussle with the top U.S. securities regulator, Coinbase continues to pivot, innovate, and expand. Recently, it launched a new blockchain, Base, and founded Stand With Crypto – an independent nonprofit aiming to drive pro-crypto legislation.
As the company is facing dips in crypto trading volumes, and consequently revenue, the focus shifts towards what the future of crypto adoption might look like. Moreover, a depreciation in transaction fees has led to the exploration of more steadfast revenue sources, like subscription models.
During a recent public earnings call, CEO Brian Armstrong discussed three fundamental aspects of adoption: blockchain scalability; the utility of non-financial crypto use; and navigating the complex landscape of crypto regulation, or lack thereof, in the U.S.
Blockchain scalability and utility are two interconnected issues, which technologists may address with technical solutions. Armstrong displayed particular optimism here, emphasizing on current scaling solutions like Bitcoin’s Lightning Network and the company’s Ethereum scaler, Base.
Nevertheless, the scalability of blockchains has been a pinch point for years. A significant influx of users comes with the problem of stratospheric transaction fees that render it unusable for most. However, the advent of second layer solutions (L2s) like Arbitrum and Optimism for Ethereum proposes a solution. These L2s have shown promising adoption rates over the past half-year, leading many to believe that this might be the panacea for broader blockchain usability.
However, while bettering the utility and making crypto payments faster and cheaper globally are step forward, Armstrong also highlighted the most daunting obstacle – regulation. The coinbase CEO made it clear that resolving tech-related issues should also include social solutions.
Coinbase is spearheading the Stand With Crypto working group, aiming to direct the trajectory of U.S. laws formulated for crypto. With two pivotal bills – the crypto market structure bill (officially FIT21) and the “stablecoin bill” sailing through the House Financial Services Committee and the House Agriculture Committee with bipartisan support and heading before the Senate, the need to influence legislation and regulation couldn’t be more timely.
The brief history of crypto adoption could indeed be overstated by painting Coinbase as a prime instigator. Nevertheless, its role in pioneering the sector is undeniable, irrespective of any legal disputes or fluctuating demand for crypto. Despite potential deterrents and an uncertain future, Coinbase still stands as a touchstone for the future of crypto adoption.
Source: Coindesk
