Coinbase endorses strategic bitcoin reserve
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Brian Armstrong, in Los Angeles, in 2024. Photo: Jason Armond/Los Angeles Times/Getty Images
The nation's largest crypto exchange, Coinbase, endorsed the idea of a U.S. bitcoin strategic reserve Friday, part of a wide-ranging blog post on "economic freedom" from CEO Brian Armstrong, shared in advance exclusively with Axios.
Why it matters: Armstrong has emerged as the unofficial spokesperson for the industry in Washington, taking a confrontational approach with its chief regulator that others have emulated.
- This is the first time Coinbase has specifically addressed the idea of a strategic bitcoin reserve, doing so just before the second inauguration of Donald Trump and Armstrong's trip to the World Economic Forum.
Between the lines: Coinbase, a publicly traded company with a $73 billion market cap, has built up considerable clout over the last two years.
- It was a leading funder of Fairshake, the collection of political action committees that played such a big role in Congressional elections.
- It also backs an advocacy organization called Stand With Crypto, which claims to have organized over two million people to support the industry.
Zoom out: In his Coinbase blog post Friday, Armstrong addressed world leaders and policy makers, arguing how crypto can accelerate economic freedom, and warning about the risks of inaction.
- "Economic growth comes from free market capitalism, deregulation, small government, and technological innovation," he wrote. "If the rest of the G20 wishes to participate in economic prosperity, they would be wise to join the growing trend of embracing economic freedom and free markets."
Armstrong calls on world leaders to do four things in the spirt of tech-optimism in the next year. First, to pass laws that keep crypto firms in their home country.
- Second, to establish strategic bitcoin reserves. "The next global arms race will be in the digital economy, not space," he writes.
- Third, establish special economic zones for the digital asset economy. Another concept we've heard discussed toward this end is regulatory sandboxes.
- Finally, make governments more efficient. He specifically cites the effort of the Department of Government Efficiency (DOGE), which has a name that references Elon Musk's favorite cryptocurrency.
A focus on Washington
Meanwhile, with Trump's embrace of crypto and more supporters in Congress, Coinbase and others are thinking now about real priorities for the industry in D.C.
- "As a company, we've always been focused about how the crypto markets are as clear as possible. So the rules around market structure as they relate to the CFTC and SEC have always been paramount to us," Faryar Shirzad, the company's policy chief, tells Axios.
- A bill along these lines reached the Senate last year, one of the first digital assets bills to even get a vote in a Congressional chamber.
- As to the specifics of how a strategic bitcoin reserve should be organized — the nation could simply opt hold onto what it already has, or begin buying bitcoin to be held by the Treasury — the company is leaving those details to policymakers for now, according to Shirzad.
Behind the scenes: Armstrong has now had two private meetings with Trump so far, according to sources with knowledge of those meetings. Once before the election and once after.
- Trump seemed highly engaged and interested in the discussions, though the specific points they covered were not known.
The bottom line: "Crypto adoption and usage has reached escape velocity," Armstrong wrote Friday.
