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From the Unbanked to the Unbrokered:
Unlocking Wealth Creation for the World
For decades, income growth from capital has dramatically outpaced that from labor, but capital ownership remains a privilege of the few. We must bridge this divide by transitioning from the current system that excludes the majority to one that empowers them. The solution lies in the convergence of technology and policy. By harnessing the transformational potential of tokenization and open blockchains, we unlock global markets for billions of savers and those wishing to raise capital. When the barriers of traditional financial infrastructure disappear, access to investment opportunities becomes as normal as owning a phone. This allows ordinary people to finally capture the upside from innovation and economic growth. This is how we narrow the capital chasm and increase economic freedom.
January 19, 2026
Read time: 3 min (executive summary) - 35 min (whole document)
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Small Banks and Stablecoins: Nothing to Fear, Much to Gain
Stablecoins are a once-in-a-generation opportunity for community and regional banks to compete on an equal footing with larger banks on payments and programmable financial services, offering 24/7, low-cost, cross-border money movement and serving as the cash leg for tokenized capital markets. And the widely voiced worry that they will drain local deposits simply doesn't hold up: multiple independent studies and Coinbase's own data find no meaningful link between stablecoin growth and community-bank outflows. As tokenized assets scale, stablecoins are more likely to complement than substitute for a bank’s core services. For small banks, the real story is opportunity.
Past the point of no returns: Supporting interest and rewards on UK stablecoins
This paper argues that the FCA and Bank of England’s proposed prohibition on offering interest and rewards for UK-regulated stablecoins is misguided and counterproductive, as it suppresses financial innovation while stifling competition in the domestic savings market. Rather than turning stablecoins into high-risk investments, the authors contend that allowing remuneration—consistent with the treatment of other payment instruments like bank accounts—would actually enhance the utility of stablecoins as a store of value, support the UK’s monetary policy transmission, and help secure the international competitiveness of sterling in a global digital asset market.
Why DeFi Matters: The Case for Open Financial Infrastructure
Decentralized finance (DeFi) applies the internet's open architecture to value, allowing assets to move through open-source protocols, smart contracts, and self-custody wallets without depending on a single intermediary. The result is a financial system with capabilities legacy rails cannot replicate, including: continuous global market access, portable assets that can be used across applications, near-instant final settlement, compliance enforced in the protocol layer, and direct ownership backed by resilient open-source infrastructure. Together, these shifts open meaningful capital markets participation to billions of people—in the U.S. and globally—who today are gated out by account-opening paperwork, geographic distance, and minimum balances. The policy question is how to design a regulatory framework that captures these benefits while concentrating KYC, AML, and sanctions controls at the regulated touchpoints where risk actually sits—minting and redemption, broker-dealer interactions, and the exercise of shareholder rights—rather than at every onchain transfer.
Safety by Design: Why GENIUS Gets Stablecoin Regulation Right
The GENIUS Act proposes a regulatory framework that aligns with the unique risk profile of payment stablecoins, distinguishing them fundamentally from traditional bank deposits. Because stablecoin issuers do not lend money, create new credit, or engage in maturity transformation, the act avoids applying restrictive bank-style regulations that address risks not present in stablecoin operations. Instead, it establishes targeted standards—focusing on full reserve backing, redemption integrity, and operational resilience—to ensure market trust while fostering innovation that strengthens the U.S. dollar's role in the global financial infrastructure.
Crypto and Quantum Computing
A sufficiently powerful quantum computer could one day challenge the cryptography that secures digital assets across major blockchains. Although these machines do not yet exist, there is broad expectation that they will eventually be built—and while many expert timelines point to at least a decade, shorter horizons cannot be ruled out.
The practical issue is that upgrading the security of decentralized systems—blockchains, wallets, exchanges, and hardware—takes time. The policy question, therefore, is how to begin a measured transition to quantum-resilient onchain finance now, rather than waiting until the need becomes urgent. That is why industry and academic experts, including those at Coinbase’s Independent Advisory Board on Quantum Computing and Blockchain, are mobilizing around practical solutions, as explained in a detailed new position paper on quantum computing and blockchain that sets out threat scenarios and migration paths for crypto infrastructure.
Blockchain-Based Financial Infrastructure for Independent Workers
Around the world, a growing share of work now takes place outside traditional payroll systems. App-based workers, freelancers, contractors, and other independent workers often earn income from multiple platforms, clients, or cash-based activities rather than a single employer. In the United States alone, the number of so-called “gig workers” was at least 42 million in 2025.
While the flexibility of independent work can expand labor market participation, it also creates significant financial frictions: delayed payments, fragmented earnings histories, difficulty proving income, and limited access to credit and other financial services. But blockchain-based payment and recordkeeping rails offer a potential framework for more portable financial infrastructure—one that allows workers to receive earnings quickly, carry verifiable income records across platforms, and build a stronger foundation for savings, borrowing, and long-term financial inclusion.
EU Strategy for Euro Stablecoins: Enabling Onchain Capital Markets
Europe faces a critical juncture in the evolution of digital finance, where it must pivot from a cautious approach toward stablecoins to active support for euro-denominated assets to preserve the euro’s global relevance. While often framed as a systemic risk, regulated stablecoins are foundational infrastructure for the future of tokenized capital markets, offering the speed, interoperability, and efficiency that legacy systems lack. To remain competitive, the EU should leverage the existing MiCA framework to foster a robust euro-based ecosystem by allowing more flexible reserve management, revising remuneration rules, and prioritizing cross-border mutual recognition. By treating stablecoins as a strategic opportunity that complements rather than competes with the digital euro, Europe can prevent a reliance on non-euro alternatives and secure its leadership in the next generation of global financial infrastructure.
Tax Policy for the Digital Asset Age
Digital assets are rapidly becoming a core part of modern finance—used every day for payments, investments, trading, and a growing range of financial services. Yet the U.S. tax reporting framework has not kept pace, and applying last century’s rules to 21st-century digital markets is leading to predictable and counterproductive results: brokers and taxpayers required to generate vast information with minimal taxable value, regulators inundated with low-signal paperwork, and all parties face rising compliance and administrability burdens in exchange for limited incremental insight for tax authorities.
As adoption grows, this mismatch between rules and technology risks distorting economic behavior. The time taxpayers must spend navigating complex reporting requirements effectively functions as a hidden tax on innovation. Targeted reforms that reduce low-signal reporting and focus on higher-value tax information can improve outcomes while creating a system that scales—one where compliance remains practical whether a taxpayer has ten transactions or ten thousand.
Micro-Access and Micropayments: How x402 Can Expand Participation in the Digital Economy
Much of the internet is structured around a simple constraint: payments are too expensive to be small. Traditional payment systems impose fixed fees and minimum transaction sizes that make it impractical to charge a few cents—or fractions of a cent—for digital services or digital work. As a result, the online economy relies heavily on subscriptions, advertising, and bundled access, while many small economic activities simply never occur.
Emerging tools built on crypto infrastructure—particularly stablecoins and the use of the web’s long-dormant “402 Payment Required” status code through the x402 payment pattern—can change that. Together, they enable what might be called micro-access and micropayments: the ability to pay or be paid tiny amounts for precisely the information, service, or task involved. By lowering the minimum economic threshold for transactions, these tools could make it easier for more people to participate in the digital economy.
Settlement Finality Onchain: A Practical Framework for Policymakers
Settlement finality—the legal moment when a transfer becomes unconditional and irrevocable—lies at the heart of financial stability. When settlement is slow, uncertain, or exposed to after-the-fact reversals, the system must absorb significant credit, liquidity, and operational risks. Traditional finance has spent decades building safeguards around these vulnerabilities, yet settlement delays, collateral burdens, and infrastructure fragilities persist.
Blockchains introduce a fundamentally different settlement model. Atomic settlement enforces simultaneous, conditional exchange: either both sides of a transaction execute, or neither does. Combined with rapid, economically enforced finality and 24/7 availability, this architecture eliminates a wide range of risks that regulators and market operators have long been forced to manage. What remains is a regulatory task: determining the moment at which a technically final onchain transaction becomes legally final. This is not a novel challenge. Every major financial system—from Fedwire to ACH to card networks—relies on statutory or regulatory definitions of finality layered atop imperfect operational realities. Blockchain settlement can be treated in precisely the same way.
Blockchain, Housing, and Financial Inclusion
Property management and mortgage lending in the United States are often still shaped by manual processes, fragmented records, and layers of intermediaries. These inefficiencies drive up costs, slow transactions, and increase the risk of errors or fraud. The burden can fall disproportionately on underbanked households and communities of color, who already face higher barriers to credit, fewer paths to wealth-building, and lower rates of homeownership. But now, blockchain and crypto technologies offer an opportunity to modernize housing finance in ways that improve efficiency while advancing financial inclusion.
At their core, these technologies can help create housing and credit systems that are more transparent, portable, and accessible—particularly for Americans whose financial lives do not fit neatly into traditional banking and credit models.
Tokenized Capital Markets: Unlocking Wealth Creation in the U.S.
Our new research paper, From the Unbanked to the Unbrokered, highlights a critical wealth gap driven by unequal access to capital markets, where many individuals are "unbrokered" and unable to grow wealth through asset ownership due to high barriers like complex fees and investment minimums. The paper argues that by leveraging tokenization and open public blockchains, the financial industry can democratize market access through fractional ownership, significantly lower transaction costs, and near-instant settlement. This shift offers a scalable solution to modernize financial infrastructure, enabling a future where individuals can easily participate in economic growth and build long-term wealth regardless of their initial investment size.
The Future of Digital Identity: The Role of Decentralised ID in the UK
Decentralised Identity represents a model for identity management in which individuals, rather than central authorities or major platforms, control their verified credentials. Enabled by cryptographic proofs and decentralised ledgers, decentralised ID (DID) promises increased privacy, portability, and security while reducing dependence on large data-holding intermediaries. While there is well-founded, broader political debate on the merits and challenges of introducing a digital ID system, if the UK Government chooses to pursue digital ID, blockchain technology can address the challenges raised and should be considered as part of the design. As part of the Government’s upcoming consultation on the delivery of digital ID, it should consider decentralised technology (i.e., blockchain) to address the range of privacy, security, single point of failure, and other legitimate concerns raised by digital ID.
From the Unbanked to the Unbrokered: Unlocking Wealth Creation for the World
For decades, income growth from capital has dramatically outpaced that from labor, but capital ownership remains a privilege of the few. We must bridge this divide by transitioning from the current system that excludes the majority to one that empowers them. The solution lies in technology, not just policy. By harnessing the transformational potential of tokenization and open blockchains, we unlock global markets for billions of savers and those wishing to raise capital. When the barriers of traditional financial infrastructure disappear, access to investment opportunities becomes as normal as owning a phone. This allows ordinary people to finally capture the upside from innovation and economic growth. This is how we narrow the capital chasm and increase economic freedom.
The case for vertically-integrated digital asset firms
Vertically-integrated digital asset firms that combine trading, custody, and settlement deliver better customer outcomes by lowering costs and improving user experience, all while reducing credit and settlement risk via prefunding mechanics and real-time, ledger-based settlement. Given these benefits, regulators should primarily supervise outcomes, allowing firms to manage integration risks with proven controls, rather than forcing pre-digital models of strict separation.
Stablecoins and Banking: Operational Improvements, Deposit Dynamics, and Financial Stability
Across recent work, the Coinbase Institute has advanced a consistent evidence-based view of stablecoins as a complementary innovation that can enhance bank operations, particularly when subject to prudent safeguards such as full-reserve backing, par redemption, and transparent disclosures. The Institute’s analysis underscores three central points: that stablecoins can expand opportunities for banks to offer faster, more efficient payment services; that well-structured stablecoins pose limited risk to traditional bank deposits; and that, when governed by frameworks like the GENIUS Act, they are compatible with—and can even support—broader financial stability.
A recent paper by Professor Lin William Cong provides further support for these positions. In his paper Stablecoins and Banking: Deposit Dynamics, Financial Stability, and Regulatory Design, Cong evaluates deposit dynamics, banking competition, and systemic risk channels under realistic yield environments and prudential design constraints, concluding that well-designed, fully reserved stablecoins can coexist with—and in many cases strengthen—bank intermediation and financial stability.
Crypto and Public Tokens
Public tokens—cryptographic assets issued by a blockchain or protocol—are one of the most visible aspects of the crypto ecosystem. While not every blockchain or Layer 2 network needs its own token, many choose to issue one as a way to coordinate participants, fund development, and secure the network in an open, transparent manner. These tokens function as both incentives and infrastructure: aligning users, developers, and validators in systems that rely on decentralized consensus rather than centralized control.
The GENIUS Act and Financial Stability
The GENIUS Act of 2025 establishes a comprehensive federal regulatory framework for payment stablecoins by mandating 1:1 full-reserve backing with high-quality liquid assets, ensuring transparent disclosures, and requiring par redemption to mitigate liquidity risks. By distinguishing stablecoins from traditional fractional reserve banking, the Act aims to eliminate inherent credit risks while fostering innovation in digital payments. Supported by potential Federal Reserve access and flexible capital requirements, the legislation positions regulated stablecoins as a safer, more efficient alternative to traditional financial instruments, ultimately reinforcing the U.S. dollar's role in the global economy.
The GENIUS Act, Interest, and Rewards
The GENIUS Act, while intended to prevent stablecoin issuers from paying interest on holdings, is being misinterpreted by banking lobbyists to restrict independent businesses from offering legitimate consumer rewards, such as discounts or cashback, when customers use stablecoins for payments. This broad, "indirect interest" interpretation threatens to stifle innovation, reduce consumer choice, and maintain high merchant fees that burden the entire economy. A sensible application of the law should limit prohibitions to issuers only, preserving the freedom for merchants and non-financial entities to incentivize stablecoin usage as a practical payment alternative to traditional credit cards.
Crypto and Agentic Commerce
As crypto and blockchain technologies evolve, a new frontier is emerging: machine-to-machine transactions, autonomous AI agents, and onchain settlement layers that integrate directly into the web. The x402 payment protocol is one such innovation, offering an open standard that lets AI agents, services, and websites define and execute payments seamlessly. For policymakers, x402 represents an opportunity to modernize payment infrastructure, align regulation with emerging economic models, and future-proof financial systems in a digitally native world.
Stablecoins and Bank Deposits: Overstating Risk, Overlooking Opportunity
Concerns that stablecoins threaten U.S. bank deposits are misplaced, as these fears overlook how stablecoins are actually used and their role in financial modernization. Rather than destabilizing the banking sector, stablecoins operate largely outside the U.S. retail banking system, catering primarily to global demand for dollar access and onchain liquidity. Their growth mirrors the historical rise of money market funds by introducing necessary competition in payments, driving innovation, and supporting new channels for credit formation that do not depend on traditional bank deposits. Ultimately, stablecoins strengthen the global role of the U.S. dollar and represent a transformative evolution toward a more efficient financial system, rather than a systemic risk.
What are NFTs?
Blockchain technology has opened new ways to record and exchange ownership, trust, and value online. Originally designed to support digital currencies, its applications now extend into areas that include decentralized finance, supply chains, and digital identity. Among its most visible innovations are non-fungible tokens (NFTs)—unique digital assets that use blockchain to prove ownership and authenticity. NFTs combine cryptography, smart contracts, and digital records to make digital items verifiable, tradable, and programmable. While the early spotlight was on digital art, NFTs now underpin use cases ranging from fractional investments to insurance and real-world asset tracking.
Let's embrace stablecoins and achieve the goals of the G20 Cross-border Payments Roadmap
The G20's cross-border payment reform is falling short-costs remain high and transactions slow-because legacy banking systems can't meet the 2027 targets. Stablecoins, however, already deliver faster, cheaper, and more transparent payments, as shown by Stanford research where most transactions settled in minutes at lower costs. Policymakers should embrace stablecoins rather than treat them as peripheral risks. Stablecoins work. It is time to say so formally and build policy frameworks that accelerate their role in transforming cross-border payments.
Crypto and Onchain Lending
Blockchain technology has transformed the way financial systems can record, verify, and exchange value without traditional intermediaries. Among its most compelling applications is onchain lending—a decentralized model in which loans are originated, collateralized, and repaid entirely through blockchain-based smart contracts rather than banks or broker-dealers. By replacing institutional trust with verifiable code, onchain lending introduces a transparent and programmable alternative to conventional credit markets. While this new system is still evolving, it demonstrates how financial intermediation can be made more accessible, efficient, and globally inclusive.
What are Protocols?
In traditional finance, rules and standards are often set by institutions, regulators, and intermediaries. In the world of crypto and blockchain, those rules are written directly into code. These sets of rules are called protocols, and they define how networks operate, how participants interact, and how transactions are validated and recorded. Protocols are the backbone of decentralized systems, creating predictable, transparent, and automated frameworks that allow for innovation at scale without relying on centralized authorities.
What are Gas Fees?
Every blockchain transaction—whether sending tokens, executing a smart contract, or minting a digital asset—requires a payment known as a gas fee. Gas fees are not just technical costs; they are the backbone of blockchain economics, aligning incentives for network participants and ensuring fair and legitimate use of the network. For policymakers and industry leaders, understanding how gas fees function is critical for evaluating both the efficiency and accessibility of blockchain systems.
Building the EU's Onchain Capital Markets
To stay globally competitive, the EU must move its capital markets onchain - embracing permissionless blockchains, decentralized finance, and regulated stablecoins - to enable faster cheaper, more open and resilient financial market infrastructure.
What are Oracles?
Blockchains are powerful tools for creating transparent, tamper-resistant records and enabling decentralized applications (dApps). But blockchains cannot directly access real-world information like asset prices or weather data. That’s where oracles come in. Oracles serve as bridges between the blockchain and external data sources, allowing smart contracts to interact with real-time events and conditions and enhancing and enabling numerous blockchain applications, including decentralized finance (DeFi), insurance, and supply chain monitoring.
Crypto and Suitability
As digital assets become increasingly integrated into global financial systems, the question of suitability—whether a product or service is appropriate for a given investor—has taken on new relevance. Traditional suitability standards were designed for broker-dealers selling securities, with assumptions about gatekeepers, intermediaries, and formal disclosures. But in the world of blockchain and crypto, where transactions often occur peer-to-peer and financial tools are programmable, suitability must evolve to reflect new models of user engagement, control, and risk. Rather than applying outdated frameworks, policymakers have the opportunity to modernize consumer protection standards to match the unique features and benefits of decentralized technology.
Crypto and Payments
Since the launch of Bitcoin in 2009, crypto and the blockchain technology that underpins them have opened new possibilities for how value can be transferred. While blockchain’s applications span supply chains, identity, and asset tokenization, one of its most transformative areas is payments. By enabling transactions without traditional intermediaries, blockchain offers the potential for faster, cheaper, and more transparent payment systems. This shift raises both opportunities and challenges for consumers, businesses, and policymakers.
How zero-knowledge proofs can bring the Bank Secrecy Act into the digital age
The Bank Secrecy Act's AML system was built for a paper era. This means that banks collect the same sensitive data over and over-increasing costs and the risk of breaches, and triggering a flood of low-value reports. Zero-knowledge proofs (ZKPs) can fix this by letting institutions prove that customers and transactions meet AML rules without exposing underlying sensitive information, enabling reusable identity credentials, increased privacy, and better data. ZKPs have the potential to modernize the financial system and benefit consumers in everything from cross-border payments to correspondent banking and beyond. To enable this technology, regulators should update BSA rules to recognize the use of ZKPs, and work with industry to set clear standards and support pilot projects.
What is Staking?
Staking is a core feature of many modern crypto networks. It allows individuals to support the security and functionality of a blockchain by temporarily locking up their digital assets. In return, participants can earn rewards, typically in the form of additional tokens.
Unlike Proof of Work (PoW), which relies on energy-intensive computing to validate transactions, Proof of Stake (PoS) randomly selects validators pursuant to protocol rules. This approach is significantly more energy-efficient and cost-effective, making it a more sustainable alternative for blockchain consensus.
What is a Strategic Bitcoin Reserve?
A strategic bitcoin reserve refers to a store of value held in the form of bitcoin by an institution—often a government, company, or central bank—as part of its financial or strategic reserves. Similar to how countries hold gold or foreign currencies to stabilize their economies and protect against shocks, a strategic bitcoin reserve involves intentionally holding bitcoin as a hedge against inflation, currency risk, or geopolitical uncertainty. This is not about speculative trading; it’s about treating bitcoin as a long-term asset that serves a macroeconomic or operational purpose.
Fact-Finding: Crypto & Consumer Protection
User-friendly platforms and clear regulations for crypto and blockchain technology are strengthening consumer protection by making digital assets safer and more accessible for everyone. These innovations can empower users to confidently engage with digital finance while reducing fraud and building trust in the evolving digital asset ecosystem. Because the blockchain records every transaction on a secure public ledger, it also serves as a powerful tool for tracing suspicious activity and supporting law enforcement efforts to combat scams.
Beyond the Deposit Debate: Why Stablecoins Complement Banks and Strengthen the Dollar
Contrary to concerns that stablecoins threaten the U.S. banking sector by eroding deposit bases, evidence suggests they act as strategic complements that reinforce the dollar's global standing. Rather than displacing domestic deposits, most stablecoin activity occurs internationally, providing essential financial services in regions with limited banking infrastructure and cementing the dollar's role in the global digital economy.
Stablecoins also expand the financial ecosystem by enabling onchain lending and offering a more efficient alternative to outdated, high-cost domestic payment systems. Market indicators show that banks and stablecoins are positively correlated, suggesting that credit is not disappearing but rather evolving into new, programmable environments. By focusing on integration rather than obstruction, the financial sector has an opportunity to modernize payment infrastructure and extend American financial leadership.
The Rise of Stablecoin Remittances: Insights from Coinbase Data
Remittances support hundreds of millions of people globally, and policymakers have long highlighted them as a compelling reason to improve cross-border payments. For a few years, payments service providers have been using stablecoins to improve their global money movement capabilities. More recently, there is increasing anecdotal and empirical evidence that migrant workers and their families are using stablecoins “on their own” to make these important support transfers. We examine Coinbase data and find that among crypto transfers that are possible remittances, stablecoins are playing an ever greater role, particularly over the last three years.
Fact-Finding: Crypto & Americans
One in five American adults owns crypto. These users represent a broad spectrum of backgrounds and political affiliations, but they agree on the need for clear crypto rules that foster innovation while protecting consumers.
Fact-Finding: Crypto & Energy
Crypto mining can incentivize the development of renewable energy projects, harness surplus energy that would otherwise go to waste, and boost local economies through job creation. At the same time, blockchain technology offers powerful tools for advancing climate solutions.
MiCA 2.0 Explainer: Safeguarding Innovation in DeFi and Stablecoins
Decentralized finance (DeFi) and stablecoins are poised to redefine global finance, offering more inclusive, efficient and accessible alternatives to TradFi. But it’s still early days. As the EU embarks on a second round of crypto regulation, it should avoid imposing rules that could stifle innovation or disadvantage the EEA globally. In Coinbase’s recent submission to the European Commission, we urge the EC to take a balanced, internationally coordinated approach to crypto market regulation.
U.S. Embraces Crypto: A Landmark Moment in Policy from the White House
The White House’s Digital Assets Report represents a significant milestone that recognizes crypto as a foundational element in the future of finance. This report stands as the most comprehensive crypto policy framework ever released by the U.S., providing a strategic blueprint for the broader adoption and integration of digital assets. It lays the groundwork for responsible growth and cooperation in the rapidly changing world of digital finance.
Community Banks Should Embrace Stablecoins, Not Fear Them
Community banks have historically been cautious about digital currencies, but stablecoins—digital tokens backed by safe, liquid assets like US Treasuries—present significant opportunities rather than threats. With the recent GENIUS Act providing clearer regulatory guidelines, community banks can now confidently explore how stablecoins can make their operations more efficient and offer customers faster, cheaper payment options. Community banks can embrace stablecoins as tools that help them compete with larger institutions, reduce transaction costs, and provide innovative services that keep customers engaged.
Fact-Finding: Crypto & Illicit Finance
Built on immutable ledgers and integrated into regulatory oversight, crypto and blockchain technologies serve as powerful tools for financial security—facilitating compliance, improving transparency, and enabling faster, more effective responses to illicit finance.
What is Composability?
Crypto and blockchain technologies have introduced a new model for building open, decentralized systems. One of the key features of this technology is composability, or the ability for decentralized applications (dApps) and protocols to seamlessly interact with one another, like building blocks. In the context of decentralized finance (DeFi), composability is a driving force behind rapid innovation, enabling developers to create complex financial products from interoperable components. As interest in digital assets and blockchain infrastructure grows, understanding composability is essential to evaluating both the promise and the risks of decentralized systems.
Fact-Finding: Crypto & Financial Inclusion
Crypto and blockchain are unlocking new pathways to financial inclusion in the U.S., especially for unbanked and underbanked communities. With just a smartphone and internet connection, users can store money, make payments, save, and invest, gaining financial autonomy even without access to traditional banking services.
What are Permissionless Networks?
Permissionless blockchains are decentralized, public networks that anyone can access, use, or build on without needing approval from a central authority. They serve as the foundational infrastructure for much of the crypto ecosystem, offering an alternative to the traditional financial system, which remains slow, costly, and often exclusionary. By enabling open participation and programmable trust, permissionless blockchains are redefining how value is exchanged and governed in digital environments.
Modernizing the EU Retail Investor Experience
Technology has fundamentally reshaped how individuals engage with financial markets. Yet the EU’s existing frameworks, including the Markets in Financial Instruments Directive II (MiFID II), still reflect assumptions from a pre-digital era. Coinbase recently responded to the European Securities and Markets Authority’s (ESMA) call for evidence on the retail investor journey, and supports efforts to modernize the regulatory framework to reflect the realities of today’s investors.
Fact-Finding: Crypto & Real-World Use Cases
Across industries, crypto and blockchain technology are being used to solve real-world problems. From improving financial access to enhancing data transparency, these technologies offer faster, cheaper, and more secure alternatives where traditional systems often fall short. While crypto and blockchain are enhancing the traditional financial system, they also have broad applications in areas like government, healthcare, and beyond, offering new ways to increase efficiency across critical sectors.
What are Self-Hosted Wallets?
As digital assets continue to grow in relevance, self-hosted wallets—also called self- or non-custodial wallets—are becoming an increasingly important part of the financial ecosystem. These tools allow individuals to directly store and manage their digital assets, without relying on centralized intermediaries like banks or crypto exchanges. These wallets are a critical piece of digital infrastructure that support privacy, ownership, innovation, and resilience in the digital economy. For policymakers navigating the fast-evolving world of crypto regulation, understanding what self-hosted wallets are, and why they matter, is essential.
Crypto and Agentic AI
As artificial intelligence becomes more autonomous, a new category, “agentic AI,” is emerging. These AI systems can initiate actions, make decisions, and transact in digital environments with limited human oversight. This innovation unlocks enormous potential, but it also raises urgent questions about transparency, safety, and control. Blockchain and crypto technologies offer critical infrastructure to help address these challenges.
What is "Digitally Native?"
In a blockchain-based economy, digitally native assets are not simply digital versions of traditional instruments—they are born and function onchain. This fundamental distinction enables properties like real-time settlement, programmability, and composability, offering transformative potential for how value is created, exchanged, and governed in digital systems.
Crypto and Housing
Property management and mortgage lending are often hindered by manual processes, redundant intermediaries, and fragmented recordkeeping. These inefficiencies can lead to high transaction costs, limited access to financing, and increased vulnerability to fraud. Blockchain and crypto technologies offer a new paradigm: one where property ownership, financing, and records are digitally verified, immutable, and easily transferable.
Crypto and Healthcare
Blockchain technology has the potential to transform the healthcare industry by improving data security, enabling patient ownership of medical records, and streamlining administrative processes. With healthcare systems under pressure to reduce costs, prevent fraud, and deliver more personalized care, blockchain-based tools—particularly those incorporating digital assets and decentralized identity—can help address longstanding challenges around data fragmentation, interoperability, and trust.
Crypto and Local Government
Local governments are on the frontlines of delivering essential public services—managing everything from transportation and utilities to education and economic development. But they often face challenges that include budget constraints, outdated technology, and limited access to efficient financial infrastructure. Crypto and blockchain technologies offer local governments new tools to operate more transparently and efficiently. By modernizing payments, improving recordkeeping, and fostering economic participation, crypto can help local governments better serve their communities.
Crypto and Small Business
Small and medium-sized businesses (SMBs) are the backbone of the global economy, driving innovation, employment, and community development. But they often face significant barriers: limited access to affordable financial services, high payment processing fees, and difficulties reaching global markets. Crypto and blockchain technology offer new tools to help SMBs overcome these challenges. By enabling faster, cheaper, and more inclusive financial infrastructure, crypto can empower small businesses to compete in a global, digital economy.
Blockchain and Gaming
Onchain gaming is a fast-growing sector at the intersection of blockchain technology and interactive entertainment. Unlike traditional games, onchain games integrate blockchain technology to give players true ownership of items, transparent economic rules, and new ways to earn and participate. As gaming continues to evolve from a hobby into a major economic and cultural force, onchain gaming opens new doors for participation, innovation, and value creation.
Blockchain and Supply Chain
Blockchain technology is reshaping supply chain management by addressing longstanding challenges such as inefficiency, lack of transparency, and trust deficits. Traditional supply chains rely heavily on manual processes, siloed systems, and intermediaries, which can result in delays, fraud, and errors. By creating a transparent, tamper-proof system, blockchain technology cannot only streamline operations but also foster accountability and trust among participants.
Crypto and Humanitarian Aid
Delivering humanitarian aid is a complex challenge, particularly in conflict zones, disaster areas, or regions with weak financial infrastructure. Traditional aid distribution often faces high costs, long delays, lack of transparency, and risks of corruption or diversion. Blockchain and crypto technologies offer a promising alternative. By using cryptocurrencies, especially stablecoins, aid organizations can deliver funds directly to recipients faster, more securely, and with greater accountability, while also respecting the privacy and dignity of vulnerable populations.
Crypto and Remittances
Remittances, or money sent by individuals working abroad to their families in their home countries, are a vital lifeline for millions around the world. Digital assets, particularly stablecoins, offer a faster, cheaper alternative to traditional remittance channels, transforming how money moves globally.
Crypto and Financial Inclusion
Financial inclusion is essential for economic growth, but the traditional global financial system has left over a billion people behind. Crypto helps bridge this gap by using decentralized technology to offer digital wallets, peer-to-peer payments, and savings opportunities, bringing accessible, secure financial services to more people in the U.S. and around the world.
Updating the FSB Global Regulatory Framework for Digital Assets
Crypto and blockchain technology have the power to revolutionize financial markets by offering increased transparency, access, and privacy. But to fully reap these benefits, we need regulations that both foster innovation and protect consumers.
Crypto Mining and Energy
Cryptocurrency and blockchain technology offer transformative benefits, from financial inclusion to decentralized transactions and enhanced security. These innovations are reshaping global finance, enabling digital ownership, and fostering new economic models. But concerns over the energy consumption of blockchain networks have sparked debate. While some argue that crypto’s energy use is excessive, others highlight its potential to drive the adoption of renewable energy and repurpose underutilized power infrastructure.
Crypto and National Security
Crypto and blockchain technology are not just financial innovations—they are fundamental to the future of economic security and geopolitical stability. As these technologies reshape global commerce and digital infrastructure, it is essential that the United States lead in crafting clear, sensible regulations. The current bold steps being taken by U.S. policymakers and regulators to advance a regulatory approach that balances security with growth will help ensure that crypto innovation remains aligned with democratic values and our national interests.
What are Memecoins?
Memecoins are a unique and experimental part of the crypto world, a mix of digital culture and blockchain technology. Unlike traditional cryptocurrencies like Bitcoin or Ethereum, which focus on security and functionality, memecoins often emerge from jokes, viral trends, or social media hype. Despite their playful origins, some memecoins, like Dogecoin (DOGE) and Shiba Inu (SHIB), have gained substantial followings and market value. While memecoins can be fun and community-driven, they can also be volatile, and investors should approach them with caution and an understanding of their speculative nature.
Crypto and AI
The convergence of crypto, blockchain technology, and AI is unlocking new possibilities in finance, governance, data management, and automation. While blockchain provides transparency, security, and decentralization, AI enhances automation and decision-making. Together, these technologies can address challenges related to trust, data integrity, and efficiency in digital ecosystems. The integration of agentic AI—AI systems capable of autonomous decision-making—into blockchain-powered environments presents both opportunities and risks, requiring careful policy considerations.
What is Decentralized Physical Infrastructure?
Decentralized Physical Infrastructure Networks (DePINs) use blockchain technology to build and manage physical infrastructure in a more efficient, open, and cost-effective manner. Unlike traditional models, which rely on centralized entities, DePINs distribute ownership and governance across a network of participants. This decentralized approach fosters competition, reduces inefficiencies, and incentivizes individuals and businesses to contribute to infrastructure development.
Unlocking the Full Potential of European Capital Markets
Crypto and tokenization have the power to transform financial markets – expanding access, improving efficiency, and fostering innovation. But to fully realize this, we need regulatory frameworks that match the scale of opportunity. In Coinbase’s recent response to the European Commission’s call for evidence on the European Savings and Investment Union, we outline key recommendations that will help unlock the transformative effects of crypto and blockchain technologies.
What are DAOs?
Decentralized Autonomous Organizations (DAOs) are a revolutionary form of governance enabled by blockchain technology. Unlike traditional organizations, DAOs operate without a central authority, using smart contracts and community-driven decision-making to manage their operations. This model offers transparency, efficiency, and inclusivity, making DAOs an innovative alternative to corporate structures, non-profits, and even governmental entities. As adoption grows, DAOs are poised to reshape how organizations are formed and governed in the digital age.
What is Decentralized Social Media?
Decentralized social media offers a new way for users to interact and share ideas, leveraging blockchain technology to foster more open, user-centric communities. By removing intermediaries, these networks put control in the hands of users and creators, allowing them to earn income -- not just likes. The growing onchain social space has already given rise to numerous decentralized apps and attracted millions of users.
What are Stablecoins?
Stablecoins are a type of digital currency designed to maintain a stable value, typically by being pegged to a reserve asset like the U.S. dollar. This stability makes them a powerful tool for both individuals and businesses, leveraging the efficiencies of blockchain technology to enable faster and cheaper payments, particularly cross-border, and offering increased access to financial services worldwide.
What is a Smart Contract?
A “smart contract” is simply a set of rules stored on a blockchain that executes automatically when certain conditions are met. Smart contracts enable developers to build apps that take advantage of blockchain technology’s security and reliability while offering sophisticated peer-to-peer functionality for logistics, insurance, gaming, and more.
What are Layer 2 Blockchains?
Blockchain technology has been revolutionary, offering secure and transparent ways to record transactions. But as more people use popular blockchains like Ethereum, they can face challenges such as slow transaction speeds and high fees. Layer 2 blockchains are designed to solve these issues, making blockchain technology faster, more affordable, and easier to use. This paper explains how Layer 2 solutions work, why they matter, and their potential impact.
What is a Crypto Wallet?
A crypto wallet is a tool for managing and accessing your crypto. Unlike a traditional wallet, which holds actual cash, crypto wallets don’t store cryptocurrency. Instead, they store a user’s private key, which acts like a password. This lets users securely send and receive crypto, and also serves as the gateway to onchain experiences, where users can interact with thousands of decentralized apps in finance, gaming, the creative arts, and more.
What is Decentralized ID?
Decentralized ID is a groundbreaking innovation that uses blockchain technology to bring more privacy, security, and control to our identities. DiD lets users manage their own personal information and how it is shared. It can also improve and streamline areas like licensing, education, and health care, making online processes much faster and more private by bringing them onchain.
What is Tokenization?
Tokenization is the process of creating a digital version of real-world assets on a blockchain. Tokens can represent many different types of assets, both financial and non-financial: cash, gold, stocks and bonds, royalties, art, real estate, and more. Essentially, tokenization allows people to buy, sell, and manage these assets more efficiently, using blockchain technology to reduce costs, speed up transactions, and increase transparency.
Crypto and Creators
Crypto and blockchain technologies are bringing new opportunities to creators across a variety of fields. Whether it’s artists, musicians, writers, or developers, blockchain and crypto offer new ways to monetize, distribute, and protect creative work that are already redefining the creator economy.
Response to 'The Evolution of Decentralized Exchanges'
The Wharton Initiative on Financial Policy and Regulation recently published a paper on “The Evolution of Decentralized Exchange: Risks, Benefits, and Oversight.” The authors explored the issues that decentralized exchanges (DEXs) pose for financial regulators. The paper found that the best course of action for regulators is to take a light, rather than heavy-handed, approach to DEXs to bolster economic growth while reducing transaction costs.
Detecting and Avoiding Scams
At Coinbase, we’re on a mission to help update the financial system to make it safer and more secure. While only 0.34% of blockchain transactions are used for illicit activity, and cash remains the preferred medium for illegal transactions, crypto security is always a top priority. And while crypto and blockchain technology offer unprecedented ways to connect people globally, they also provide bad actors with a vehicle for reaching potential victims. Fortunately, users can protect themselves from common scams by staying vigilant and following the simple steps discussed below.
Crypto and Privacy
In traditional financial systems, and in our online lives generally, privacy is often at risk. Intermediaries like banks not only process transactions but also hold vast amounts of sensitive user data, making them targets for data breaches and cyberattacks. Additionally, governments and corporations frequently engage in surveillance, tracking user activity across digital platforms. As we move from an online to onchain world, crypto and blockchain technology offer solutions that empower individuals to protect their privacy while transacting, creating, and communicating digitally.
What is DeFi?
Decentralized Finance (DeFi) is a rapidly growing space that encompasses a wide range of financial services built on decentralized networks. With DeFi, you can do most of the things that traditional financial (TradFi) service providers support—earn interest, borrow, lend, buy insurance, trade derivatives, trade assets, and more—but it’s faster and doesn’t require paperwork or a third party. As with crypto generally, DeFi is global, peer-to-peer (meaning directly between two people, not routed through a centralized system), pseudonymous, and open to all.
What is a Blockchain?
Blockchain is a revolutionary technology that serves as the backbone for cryptocurrencies like Bitcoin and Ethereum. At its core, a blockchain is a decentralized and distributed digital ledger that records transactions in a secure, transparent, and immutable manner. Each record, or "block," contains a set of data, and these blocks are linked together to form a chain. Once a block is added, it is incredibly difficult to alter, making the entire system highly secure.
What is Crypto?
At its core, cryptocurrency is decentralized digital money, designed to be used over the internet. Bitcoin, launched in 2008, was the first cryptocurrency and remains the most widely known and influential. Other prominent cryptocurrencies include Ethereum, USDC, and Solana. Unlike government-issued currencies, cryptocurrencies are managed by peer-to-peer networks running open-source software, and they offer a global, 24/7 means of transferring value quickly, securely, and at low cost.
Why the Future of Finance Calls for a Permissionless Architecture
The global financial system is ready for an update. This paper sets out a vision for a more responsive, effective, and resilient infrastructure, built on permissionless systems. At the center is tokenization—turning assets into digital records that can be exchanged as easily as sending a text. When built on open systems, tokenization gives users more control over their money and data, helps financial institutions with compliance, and allows developers to create new products and services. This will transform how we do business today, bringing new opportunities for growth and innovation.
Executive Summary: The Role of Permissionless Architectures
This paper offers a concise overview of the potential for asset tokenization on permissionless blockchain networks to enable a more responsive, effective, and resilient financial infrastructure.
Building Smarter States: How Blockchain Can Revolutionize Governance
Governments should treat blockchain as a core pillar of “strategic governance,” using it alongside AI to deliver smarter, cheaper, and more trusted public services across multiple domains. We showcase concrete use cases already emerging worldwide—such as tokenized vehicle and land registries, decentralized identity for accessing services, onchain voting pilots, stablecoin payments for taxes, remittances, and welfare, secure health data and pharma supply chains, and even holding Bitcoin as part of strategic reserves. We also highlight cross-government data sharing via interoperable ledgers, tokenized municipal bonds that reduce issuance costs and broaden access, and NIST-style standards that pair blockchain with AI for secure automation and content authentication. Taken together, we present a roadmap for “building smarter states” by embedding blockchain infrastructure into records, payments, capital markets, and data-sharing systems so that governments can do more with less while improving integrity, inclusion, and resilience.
Tokenizing Assets: Benefits for the Financial System
Tokenization is the process of representing a real world asset on a blockchain. Tokens can represent many different types of assets, both financial and non-financial: cash, gold, stocks and bonds, royalties, art, real estate, and more. The limit of what can be tokenized is only what can be tracked and put on a ledger.
This transition to a blockchain ledger facilitates many important potential changes that can reduce risk thanks to the properties of the rails on which assets can now be transferred and traded. These significant changes will be explored by the Coinbase Institute over the coming months in a series of papers on asset tokenization and its benefits.
The State of Crypto: The Fortune 500 Moving Onchain
Coinbase’s Q2 2024 State of Crypto report shows that the onchain shift is now firmly an enterprise story, with more than half of Fortune 500 companies already exploring or implementing crypto and blockchain initiatives, and a 39 percent year-over-year increase in such projects driven by use cases like consumer payments, tokenized funds, loyalty and rewards, and operational efficiencies. The report combines new survey data from large corporates and U.S. small businesses with case studies—from major payments firms like PayPal and Stripe to BlackRock’s tokenized BUIDL fund—to argue that onchain infrastructure is becoming a strategic pillar for mainstream finance and commerce, not just a niche technology.
Expanding Access with Decentralized Physical Infrastructure Networks
Decentralized Physical Infrastructure Networks (DePINs) have the potential to provide greater access to services like internet connectivity, energy and transportation. Leveraging blockchain and digital asset rewards, DePINs offer a new model for developing and managing physical infrastructure that has the potential to be more accessible, affordable, and secure.
Equipping Local Governments with Digital Assets and Blockchain
As cities and states grapple with the challenges of the 21st century, digital assets and blockchain offer innovative solutions. From streamlining benefits programs to simplifying title transfers and tax collection, these technologies can transform the way local governments work every day.
The State of Crypto: Fairer, Cheaper, Faster Everyday Finance
Coinbase’s Q4 2023 State of Crypto report shows that, despite market volatility and regulatory uncertainty, crypto has become a mainstream feature of the U.S. financial landscape, with tens of millions of Americans holding digital assets and strong adoption among younger and more diverse demographics. Drawing on new survey data, it finds that most Americans believe the current financial system is outdated and unfair, see blockchain-based finance as part of the long-term solution, and want policymakers to modernize rules rather than push innovation offshore. The report frames 2024 as an inflection point: regulatory clarity and pro-innovation policy could unlock further onchain use cases, capital formation, and competitiveness for the U.S., while continued ambiguity risks ceding leadership to other jurisdictions.
Empowering small businesses with digital assets and blockchain
Small businesses are leveraging the revolutionary potential of digital asset and blockchain technologies to address their distinct challenges. A new primer by the Coinbase Institute explores how these technologies can make everyday business processes more accessible, automated, and secure.
Why Crypto? Use case deep-dives
We explain why crypto matters by moving beyond theory to concrete, real-world use cases across finance and society, showing how global, decentralized, open blockchain networks are already being used as a store of value in high-inflation economies, to cut the cost and delay of remittances, to tokenize assets and broaden investment access, and to deliver humanitarian aid quickly in crises. Beyond finance, we highlight emerging applications in climate and carbon markets, healthcare data and vaccine supply chains, decentralized identity and anti-trafficking, disinformation resilience, supply-chain transparency, science funding and collaboration, social media, energy, the arts, and the metaverse. Taken together, these examples illustrate how crypto can improve trust, access, efficiency, and transparency in critical systems that traditional infrastructure often serves poorly.
Blockchain and Artificial Intelligence (AI): Complementary Technologies That Can Make Each Other Better
The digital revolution created access to vast amounts of data. AI holds promise to make efficient use of this information, while blockchain can protect against some of the key risks and concerns around privacy, interoperability, standardization, and protection. In this white paper, the Coinbase Institute explores how blockchain and AI can help each other reach their full economic and social potential.
The State of Crypto: Age, Access, and Agency
Coinbase’s Q3 2023 State of Crypto report, Age, Access, and Agency, finds that younger Americans—especially Gen Z and Millennials—see the traditional U.S. financial system as outdated, exclusionary, and failing to deliver the “American Dream,” with only 9 percent of Gen Z and 19 percent of Millennials saying that dream is achievable for everyone, and just 9 percent of Americans overall satisfied with the current system. More than half of younger adults say they rarely or only sometimes use the legacy system and a majority do not view it as better than alternatives abroad, so they are building new paths to prosperity through flexible work, multiple income streams, and growing use of crypto and blockchain-based tools that move at the speed of the internet and do not rely on traditional middlemen.
Primer on Tax and DeFi
Decentralized Finance, or “DeFi,” offers an innovative way of conducting traditional finance peer to peer, without the need for intermediaries like banks or brokers. But these same features make it difficult to accurately tax DeFi transactions. While DeFi continues to attract interest from individuals and institutions around the world, the lack of government guidance on taxation has led to increasing uncertainty. This paper explores the issue of DeFi and tax and proposes the use of an optional “tax identity” attestation token linked to each transaction that can facilitate collection of a transaction tax.
Primer: Decentralized Social Media
Decentralized social media offers a new way for users to form communities and share ideas without the control of big tech. This new model of social networking embraces the web3 vision of a user-owned internet, leveraging blockchain technology, crypto tokens, and open source software to let users control and profit from the content they create. While “DeSoc” faces challenges related to scaling, costs, and content moderation, it has already given rise to numerous decentralized apps and attracted millions of users to its vision of social networking onchain.
The State of Crypto: Corporate Adoption
More than half—52%—of the Fortune 100 have pursued crypto, blockchain or web3 initiatives since the start of 2020, according to the enclosed research conducted in partnership with The Block. About 60% of Fortune 100 initiatives reported since the start of 2022 have been either in the pre-launch stage or already launched. Zooming out, 83% of surveyed Fortune 500 executives who are familiar with cryptocurrency or blockchain say their companies have either current initiatives or are planning them.
These companies, among the world’s largest and best known, are innovating and investing in these technologies because they know that our century-old global financial system needs updating, that blockchain can be a foundational solution, and that not keeping pace will mean losing ground in this global economy to competitors around the world, among other reasons. About two thirds (64%) of surveyed Fortune 500 executives who are familiar with cryptocurrency or blockchain say that investing in these technologies is important for staying ahead of their competition.
Primer on Decentralized Apps
Decentralized apps are like typical apps we use for financial services, games, art, and more. But most “dapps” are built on blockchains, use open-source code, and are controlled by smart contracts—not big tech. By empowering and rewarding users, dapps can spur innovation in the new, more open version of the internet known as web3.
International Survey of Web3 Adoption
Coinbase Institute’s International Survey of Web3 Adoption, covering more than 32,000 adults with internet access across 16 countries, finds that Web3 and crypto are now widely known globally—82 percent of respondents are at least somewhat aware of crypto and 66 percent recognize at least one concrete Web3 use case—but actual usage still lags, with about 31 percent currently using any Web3 service and adoption skewed toward emerging markets. Payments, NFTs, and trading on centralized exchanges are the best-known and most used services, centralized exchanges are the dominant entry point into Web3, and self-hosted wallets are gaining traction (around 39 percent use a software wallet and 29 percent a hardware wallet), even as most users still rely on custodial platforms. Looking ahead, respondents expect their Web3 usage to grow by roughly 50 percent over the next three years, but cite volatility, lack of understanding, and lack of funds as key barriers for non-users, underscoring the need for clearer rules, better education, and more user-friendly products to unlock the next wave of global onchain adoption.
Defending American Leadership: The National Security Case for Crypto and Blockchain
With countries around the world embracing crypto and blockchain technology, the U.S. stands at a critical juncture. In this white paper, the Coinbase Institute explores how the U.S. commitment to fostering technological innovation has powered its global leadership over the past century, and why it is crucial that the U.S. take the same approach with crypto.
Decentralized Identity
Decentralized ID is a new approach to identification that uses blockchain to bring more privacy, control, and security to individuals’ online identities. DiD has the potential to transform areas ranging from healthcare to supply chain tracking, providing tangible benefits to individuals and institutions alike.
Crypto Innovation is Essential to Curtailing Illicit Finance
The United States has a significant opportunity in the coming years to lead the world in digital asset innovation, which will better prepare it to combat financial crime and protect national security. But this leadership depends on a U.S. regulatory landscape that holds bad actors to account while fostering private innovation. As explained in Coinbase’s recent response to the U.S. Treasury Department's request for comment on “Ensuring Responsible Development of Digital Assets,” the U.S. government should focus on facilitating the use of blockchain and other new technologies that provide unique opportunities to track and disrupt illicit finance.
National Security in the Age of Digital Innovation: The Critical Role of Crypto
This paper argues that crypto is not a national security threat to be pushed offshore, but a foundational digital infrastructure that the United States must lead in if it wants to preserve its financial and geopolitical edge. It explains how blockchain-based networks can make payments, capital markets, and sanctions enforcement more efficient, transparent, and resilient, while warning that if innovation migrates to other jurisdictions, rivals and adversaries will gain more influence over the next generation of the global financial system. The paper concludes that a strong, rules-based U.S. crypto policy—grounded in clear regulation rather than hostility—is essential to sustaining the dollar’s role, reinforcing the effectiveness of economic sanctions, and ensuring that digital innovation strengthens rather than weakens U.S. national security.
Tornado Cash, OFAC and a Whirlwind of Confusion
The series of updates and clarifications from the Office of Foreign Assets Control (OFAC) on Tornado Cash illustrate the challenges of shoehorning new and novel technologies into existing regulatory frameworks in ways that were not envisioned by Congress. On November 8, 2022, OFAC delisted and simultaneously redesignated decentralized virtual currency privacy protocol Tornado Cash to its sanctions list – this time sanctioning Tornado Cash under its authority to designate malicious cyber activities and for supporting the Government of North Korea. The announcement also is the second time OFAC has publicly clarified the scope of its sanctions against Tornado Cash. It previously issued one set of frequently asked questions in response to concerns regarding the unprecedented sanctions. It has now a second set, which includes corrections to its initial FAQs. The announcement also comes after several lawsuits were filed challenging OFAC’s authority to sanction the decentralized privacy protocol (including one supported and funded by Coinbase).
Degrees of Decentralization in DAOs
A decentralized autonomous organization (DAO) is a new type of organization that is user-owned and user-governed. DAOs aim to build more cohesive, transparent, equal, and democratic communities by lowering agency costs, empowering users, and enhancing trust through decentralization. At the same time, decentralized decision making also has its costs, including lower levels of expertise, weaker protection of trade secrets and confidential information, and challenges in coordination. Thus, how decentralized should DAOs be? Decentralization happens on a spectrum. It depends on how the technology behind the DAO alters the tradeoff between costs and benefits in specific contexts. Organizers of DAOs thus have to carefully decide which decisions are taken as a group, which ones are delegated to representative agents, to strike the most appropriate balance for their situation and achieve better outcomes.
Australia’s Digital Economy
Digital technologies bring new opportunities to all economies. Yet the particular shape of these opportunities depends upon the specific industrial structure and institutional configuration of each economy. This report asks what specific opportunities web3 digital technologies brings to Australia, a well-educated, highly urbanised, prosperous and stable, property-owning democracy with a relatively small but highly open economy that is dominated by export-focused primary industries. The main benefits to Australia of web3 technology innovation will come from the mainstream creation and adoption of digital assets (‘tokenisation’). These will greatly facilitate efficiencies and productivity in trade, capital and financial infrastructure, but will bring innovation at the convergence of fintech, tradetech and regtech. These opportunities will deepen Australia’s competitiveness in primary goods and education and develop a new export industry in digital trade infrastructure (providing, e.g. provenance and certification, plus financial and regulatory services). To realise this opportunity, Australia needs deep institutional self-evaluation and analysis of the type successfully undertaken when well-focused political will sought to deliberately adapt Australia’s economic institutions and regulatory environment to the effects of deep technological change on key sectors. We ask here - what would a Campbell report on the financial system or Hilmer Report on competition policy look like if done now for Australia’s digital economy?
Evaluation of Systemic Risk in Crypto
Coinbase Institute’s systemic risk paper finds that, while crypto is still far too small relative to banking, public markets, and real estate to pose a systemic threat today, policymakers should already be mapping where contagion could arise as the ecosystem grows. Using network analysis of Bitcoin flows, it shows that a handful of centralized entities—especially exchanges, custodians, bridges, and large stablecoins—sit at the core of onchain activity and could either amplify shocks or act as shock absorbers, depending on how they are regulated. The paper argues that crypto’s structural features—decentralization, onchain transparency, and instant settlement—can reduce some traditional financial stability risks, but that opaque off-chain lending, poorly designed stablecoins, and lightly supervised touchpoints with traditional finance warrant closer oversight and continuous monitoring as tokenization and institutional adoption accelerate.
Stablecoins White Paper
Coinbase Institute’s stablecoin whitepaper explains how stablecoins—now a ~$145 billion market dominated by fiat-backed, U.S. dollar–pegged tokens—are emerging as a new form of money used for trading, payments and remittances, financial inclusion, and as core collateral in DeFi. It distinguishes fiat-backed, crypto-backed, and algorithmic designs, showing that fully reserved fiat-backed stablecoins have generally maintained their pegs, while most unbacked algorithmic stablecoins have failed, and argues that policy should reflect these differences. The paper recommends allowing non-bank as well as bank issuers to offer fiat-backed stablecoins, subject to stringent requirements on reserves (cash and short-term Treasuries), capital buffers, transparency and audits, operational resilience, and supervision, alongside clear rights for holders in insolvency and strong AML and consumer-protection rules. Done well, the paper concludes, stablecoin regulation can support safer, cheaper, more inclusive payments and digital asset markets without undermining financial stability or monetary policy.
Crypto & Remittances
Coinbase Institute’s Crypto and Remittances paper shows how a remittance system that moves more than half a trillion dollars a year—often at fees above 6 percent and with multi-day settlement—still relies on slow, intermediated rails that hit low-income families hardest. The paper explains how crypto and, in particular, dollar-denominated stablecoins can act as a faster, cheaper bridge for cross-border transfers, enabling near-instant settlement, lower transaction costs, and digital storage of value even for unbanked recipients. It highlights early real-world examples of crypto remittances and argues that, with appropriate AML/KYC safeguards, onchain payments can help countries meet the UN goal of cutting average remittance costs to 3 percent and keep more money in the hands of the people who need it most.
Pure Momentum in Cryptocurrency Markets
Momentum is one of the most widespread, persistent, and puzzling phenomenon in asset pricing. The prevailing explanation for momentum is that investors under-react to new information, and thus asset prices tend to drift over time. We use a unique feature of cryptocurrency markets: the fact that they are open 24/7, and report returns over the last 24 hours. Thus, the one-day return is subject to predictable fluctuations based on the removal of lagged information. We show that investors respond positively to changes in reported returns that are unrelated to any new release of information, or change in the asset fundamentals. We call this behavioral anomaly “Pure Momentum”.
Crypto and the Climate
Coinbase Institute’s Crypto and the Climate paper explains how crypto networks use energy today, why Proof-of-Work mining has drawn scrutiny, and how the sector’s climate impact compares with other industries like banking, gold, and heavy manufacturing. It shows that while Bitcoin’s electricity use is significant, crypto mining is increasingly powered by renewables, can absorb otherwise wasted energy (such as flared gas), and is rapidly shifting toward far more efficient consensus mechanisms like Proof-of-Stake that can cut energy use by over 99 percent. The paper argues that crypto’s energy efficiency has improved faster than most legacy sectors and that, with better data, thoughtful regulation, and continued technical innovation, blockchain can both reduce its carbon footprint and play a constructive role in broader climate and sustainable-development strategies.
Crypto Risk and Traditional Market Risk: A Comparison
In finance theory, the evaluation of the true risk of an asset includes two components: (i) volatility; and (ii) correlation with the overall market. In examining crypto’s volatility, we find that Bitcoin and Ethereum have similar volatility to commodities such as oil and natural gas, and comparable in size and volatility to stocks such as Tesla, Lucid, and Moderna. In examining crypto’s correlation with the overall market, we find that large cap cryptos have a lower volatility and a higher correlation than other cryptos with the overall market. In examining crypto’s beta, which, is the product of volatility and correlation, and the true measure of the risk of an asset, we find that Bitcoin and Ethereum have similar risk profiles to many other commonly held stocks included in the Nasdaq 100.
Whitepaper: DeFi and Tax Reporting & Withholding
The lack of detailed regulatory guidance on the tax treatment of cryptocurrency and digital assets, particularly so-called “DeFi” transactions, has created uncertainty within the crypto ecosystem for how to properly apply tax and tax information reporting to such transactions. We would recommend the use of identity tokens and some form of transaction tax to solve for many of the gaps that currently exist in applying tax to DeFi transactions. These processes ideally would preempt more punitive measures that governments may impose.
Whitepaper: NFTs and Indirect Taxes
There is a lack of certainty regarding the application of indirect taxes to transactions that include Non-Fungible Tokens (NFTs), specifically U.S. sales tax and Value Added Tax (VAT). However, some jurisdictions have started to impose transaction level taxesto sales of NFTs and that will expand. In the interim, there are some reasonable solutions for marketplaces to mitigate some of the risks for themselves and NFT sellers. This includes determining exposure through the use of IP addresses. Ultimately and inevitably,smart contracts will need to include transaction taxesin future sales.
Whitepaper: US Taxation of Cryptocurrencies
The crypto ecosystem has enjoyed rapid growth and wide acceptance within the US and abroad. It also has engendered considerable concern among Congress, Treasury and the IRS regarding tax compliance, resulting in legislation and forthcoming regulations regarding information reporting But, there is a huge tax gap in mainstream tax policy for crypto, which hinders growth, liquidity and U.S leadership in the crypto economy. The lack of guidance on critical U.S. tax matters impedes expansion of these markets within the United States, creates incentives for users to transact on non-U.S. platforms and creates confusion as different market participants report identical items differently. The following Whitepaper provides a summary of open areas that call for active dialogue and collaboration with policy makers to clarify and properly tax participants in the crypto economy.
Coinbase’s Digital Asset Policy Proposal (dApp)
Coinbase’s Digital Asset Policy Proposal sets out a four-pillar framework for how the U.S. should regulate crypto: create a dedicated regime for digital assets rather than forcing them into 1930s-era securities and commodities rules; designate a single federal regulator with a self-regulatory organization to oversee marketplaces for digital assets; strengthen protections for holders through tailored disclosure, market integrity, and resilience requirements; and promote interoperability and fair competition so innovation can flourish on open, onchain infrastructure. The paper argues that without clear, fit-for-purpose rules, the U.S. risks ceding financial and technological leadership to other jurisdictions, whereas a modern, tech-neutral framework can enhance consumer protection, improve market efficiency and transparency, and extend access to financial services for the 1.7 billion people globally who are still unbanked or underbanked.
Digital Asset Policy Proposal
Coinbase’s Digital Asset Policy Proposal calls for the U.S. to modernize its approach to crypto with a fit-for-purpose framework built on four pillars: regulate digital assets under a dedicated regime rather than forcing them into 1930s securities and commodities laws; designate a single federal market regulator, supported by a self-regulatory organization, for marketplaces of digital assets; protect and empower holders through tailored disclosure, market integrity, and resilience requirements; and promote interoperability and fair competition so innovation can flourish on open, onchain infrastructure. The proposal argues that clear, technology-neutral rules are essential if the U.S. is to safeguard consumer protection, extend access to financial services, and maintain its leadership in global finance and technology rather than ceding it to more proactive jurisdictions.