Coinbase calls for new regulator and framework for the crypto sector

Yahoo Finance’s David Hollerith joins the Yahoo Finance Live panel to discuss Coinbase calling for new regulation in the crypto sector.

Video transcript

ZACK GUZMAN: I want to spotlight what we heard from Coinbase yesterday to kick us off in today's crypto corner after that company officially laid out a policy framework for pushes that they hope to see come through, including a full-time dedicated regulator just for digital assets.

It's an interesting thing to call for, of course, in the wake of their battle with the SEC when they got shut down in terms of offering customers that lending platform. They would have been able to earn interest on their crypto assets, but wasn't a thing to happen at Coinbase.

And for more on what the company is calling for, I want to bring I'm Yahoo Finance's David Hollereith here who's been tracking that for us. And David, I mean, it was very public, the battle between CEO Brian Armstrong and Gary Gensler in the SEC. So what are they pushing for now?

DAVID HOLLERITH: Right, yeah. So Zack, as you said, they're pushing for a single regulator to cover the crypto sector, as well as a sort of a private sector equivalent that would sort of help and make rules alongside them to govern the asset class and the sector.

And then in addition to that, they want a completely different framework. And when you dig deeper into their proposal, you get a lot of what you've already heard about voices from the cryptocurrency community, saying--

So we're looking at sort of, like, a place where Coinbase has come and they've taken a lot of other proposals, put them together and used it as sort of a broader framework for principals. But more interestingly, I think, this means that the industry, at least its largest US base exchange is now sort of going on the offense in Washington.

ZACK GUZMAN: Yeah, I guess, for me too. The other interesting piece of all this is there's a lot of things down the line, right? We're talking about a Bitcoin ETF potentially getting cleared next week. Bitcoin, of course, established not as a security.

But then you got everything else that the SEC is kind of dealing with or not dealing with, as some people have critiqued, in labeling whether if these things are securities or not. NFTs might fall under that category, depending on how you want to look at it. But Coinbase also moving into that direction.

I don't know about you, I was surprised to see 1 and 1/2 million people on their waiting list. That would be about four times the people who are currently operating on OpenSea, that NFT platform. Seems like a big opportunity for Coinbase?

DAVID HOLLERITH: Yeah, it is interesting. I would think that the NFT platform is primarily-- was moving the stock price, although the regulation sign might be good too. But, yeah, compared to Robinhood, I think, Coinbase is sort of-- they're sort of trying to find a different model, if you will, and I've spoken with the analysts who have sort of said that they're going to look more into infrastructure. And I'm not really sure what infrastructure always means in the crypto sector.

But Robinhood-- they're trying to be sort of the Amazon of all assets. So if Coinbase is leaning that direction too by launching this NFT platform, it is going to be interesting to see what they do if they're trying to continue to sort of offer exchanges or crypto assets through the exchange service and get most of their fees through that or if they're thinking about doing other things that are more working with businesses specifically as opposed to investors.

ZACK GUZMAN: Yeah, and, I mean, we'll continue to track what happens there. Kind of surprising when you see Coinbase still down too, relative to some of the other names in the crypto space over the last few months given the riot that we've seen in Bitcoin. But David Hollerith bringing us the latest there on the crypto front. Appreciate that.