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See compliance premium from Coinbase listing

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Coinbase is now planning to go public through a direct listing.

Original title: "Gu Yanxi: Looking at the compliance premium from the listing of Coinbase"

Original source: Planet Daily

Coinbase is now planning to go public through direct listing. Prior to this, the market estimated that Coinbase's listed market value was 28 billion US dollars. I don't know what the market value will be when it actually starts listing. But one thing that is absolutely certain is that its market value will be a very high PE. Such a result is not only a reflection of Coinbase's long-term business development and management, but also the market's high recognition of its compliance management and future development.

Coinbaseis the world's first encrypted digital< span class="font">currencyone of the exchanges. The company is registered in the United States, and has been operating in a manner within the scope of US regulation. Since it started in the early days and has always operated in a compliant manner, it has attracted a compliance-oriented user group among transaction users. Therefore, during its operation period, although it did not provide many trading varieties, nor did it provide trading products such as contracts, its trading volume has been growing steadily. Even today, Coinbase is not the number one trading volume. Clearly trading volume is not the primary goal of Coinbase. In the past few years, it has been focusing on compliance development and infrastructure construction. It is this kind of business strategy that has laid a solid foundation for its long-term development in the US market.

During the development of Coinbase, its former chief legal officer OfficerBrian Brookshas laid a very strong foundation for Coinbase in terms of compliance construction. Among its compliance initiatives, Coinbase led the establishment of an industry alliance-like encrypted digital currency rating committee (Crypto Rating Council, CRC). CRC judges the encrypted digital currency in the market and judges the possibility that the encrypted digital currency is more recognized as a security. Ratings are divided into 1~5 files. A score of 1 is the least likely to be a security, and a score of 5 is the most likely to be considered a security. Among the cryptocurrencies it evaluates, Bitcoin is rated1, and was recently SEC SuedRipple was scored 3.75. Although the committee's ratings have not been generally accepted by the industry and implemented in their respective businesses, the work of this committee does reflect its efforts to promote more compliance in the industry. Brian Brooks paid special attention to communication and cooperation with various regulatory agencies during his tenure as the chief legal officer of Coinbase , to cooperate with the relevant work of various regulatory agencies. It is because of his efforts and his professionalism that he was hired in 2020 as Acting Commissioner of OCC, which oversees the US banking industry. It can be seen that the US financial regulators highly recognized his work during Coinbase.

CoinbaseFocus on compliance business strategy has not allowed it to achieve substantial financial gains in the short term Growth, but due to its compliant operation and regulatory approval, it is far ahead of other similar companies in merging into the mainstream financial sector. On the one hand, this mode of operation can allow it to obtain business from institutions that hold a large amount of funds, and at the same time, it can help it obtain greater development opportunities. And one such big opportunity is the digital asset exchange that is sure to emerge in the United States.

At present, the encrypted digital currency trading platform in the US market is operated by obtaining the money transfer license issued by each state. But such levels of regulation and the nature of compliance do not match the nature of cryptocurrencies. In view of the paradigm change that blockchain technology brings to digital assets and the global users it can reach, it must be regulated at the national level at the regulatory level. Moreover, such regulatory policies largely require international cooperation. Therefore, in the U.S. market, the most reasonable way is to establish a U.S. national-level digital asset exchange (see my article "Some Predictions on Digital Asset Exchanges That Will Appear in the United States"). Such an idea has already been proposed by Gary . Gensler, who will be the chairman of the SEC.

Gary . Gensler’s application of Bitcoin and blockchain technology in the financial industry With deep research and understanding. He also communicates with leading figures in the industry at national and international level. These levels include researchers in academia, financial regulators, and technology and business leaders in the industry. Gary . Gensler served as Chairman of the CFTC during the Obama Administration. Under his strong promotion, the U.S. financial market has realized stricter supervision of over-the-counter derivatives transactions. Regarding the current supervision of the encrypted digital asset industry, Gary . Gensler is very clear about how to regulate and promote the development of this industry from the perspective of supervision. Therefore, after he serves as the chairman of the SEC, he will definitely work with the leaders of other financial regulatory agencies to promote the standardized development of this industry in the US market. Gary . has long been aware of the regulatory mismatch of encrypted digital currency transactions in the U.S. market. He has suggested that such transactions should be regulated at the national level. In addition, in view of the inevitable trend of encrypted digital assets in the global development, he is likely to promote the establishment of a national-level digital asset exchange in the United States. If SECestablishes such a digital asset exchange license, then Coinbasesince so far So far in this field, it is very likely to be the first to obtain such a digital asset exchange license due to its operating foundation and compliant operation characteristics, especially because it will soon obtain the status of a listed company. In this emerging field of encrypted digital asset trading, if you are the first to obtain such a business license, and based on the business foundation the company has established so far, then Coinbase will be far ahead of other competitors. And this will bring a higher premium to the market value of Coinbase.

CoinbaseAnother opportunity for compliance development and operation isOCC The payment bank license that is being promoted now. This license is to allow the holder to focus on the payment business. Companies with this license can be directly connected to the Federal Reserve's payment system, thus becoming an integral part of the US banking system. This license was promoted by Brian Brookswhile acting as OCC Acting Director. If this license is established, financial technology companies such as Coinbase and PayPal can apply for this license. Also because of the compliant operation of Coinbase, it is very likely to obtain this payment bank license. This also increases the value of the company substantially.