Brian Armstrong, welcome to Sorcery.
Yeah, thanks for having me.
What are we doing today? What is this?
This is the Coinbase system update. We do this twice a year to talk about everything we shipped in the prior six months, and we're executing faster than ever, largely because of AI. We're shipping about twice as much code year-over-year, and we're doing it with higher quality, fewer bugs. So it's a really exciting time, and there's lots of things that we've been announcing today — you know, tokenized stocks, unifying our global liquidity, a bunch of AI tools for how we're going to bank, you know, the AI agents of the world.
Let's touch on the AI one. I mean, I think for a long time people have been using these LLMs or AI agents to ask financial and investment-type questions, but they never had full context on your actual account. They couldn't take action on your account. So we released something called Coinbase MCP. It basically allows any AI agent to connect to your Coinbase account, and you can talk to it in plain English, and it can trade on your behalf, but within guardrails that you set. But beyond that, we're actually putting this AI technology right in the Coinbase app with Coinbase Advisor. It's a SEC-registered investment advisor — the AI agent itself, which is kind of a new thing. And lastly, we're really trying to provide financial accounts for the AI agents themselves, because increasingly we're going to see this agentic economy form, where AI agents are paying for goods and services, they're hiring other agents on a team, and they know they need new financial infrastructure to pay for all these things, and we built the full stack at Coinbase.
So yesterday in our interview, which will probably come out next week, you mentioned you now will be able to reach 4 billion more users. So how do you reach 4 billion more users?
Yeah, well, there's 4 billion unbrokered people in the world who basically can't access high-quality investments like US stocks. A lot of times people have heard about the unbanked of the world or the underbanked.
There is true — there actually are about, you know, there's billions and billions of people that are unbanked as well, but there's also the unbrokered. So you can imagine if the average person didn't have access to high-quality investments, what does that mean? They just hold their money in cash, where it might erode some value, or they can put their money into low-quality investments. But what if these 4 billion people around the world could also own Nvidia or Coinbase stock? Like this would be a great democratizing force for the world and a good business.
So you're building the everything exchange. What does that mean?
Well, we're bringing every asset class on chain to trade in one unified account with great liquidity and capital efficiency for traders. So I think people sometimes still think about Coinbase like 14 years ago when it got started as a place to buy and sell Bitcoin. And sometimes they're like, 'Oh, Bitcoin's down,' and whatever. But we actually allow people to trade everything on Coinbase now — stocks, commodities, pre-IPO perps, prediction markets. And you can do it in one account with great liquidity and capital efficiency. So that's what we're building. And I think in any given moment, in any financial market, something's going to be up, something's going to be down. And what we try to do is put good information in front of customers so they can know what trades to make at any given time, and yeah, help meet their financial goals.
So I interviewed Cathie not too long ago, and she said that pressure makes diamond hands.
So what is it like operating through the cycles, and how does AI help that?
Yeah, well, we're used to this at this point. I mean, you have to remember I grew up in 2012 where Bitcoin was like five or 10 dollars. I've been through four cycles in crypto. And again, people still think of it as crypto broadly. It's really just like the core Bitcoin, Ethereum, Solana. Again, now there's like stablecoin payments are growing like crazy even in this so-called winter. Prediction markets are growing like crazy. Derivatives are growing like crazy. The agentic infrastructure is growing really well. So there's actually like I think Coinbase does our best work in, you know, down markets because we're in it for the long haul. You know, other people are tourists, they get distracted, they deprioritize what they're doing. We just get more work done, and it sets us up really well for the next bull run.
Okay, this is going to be the most difficult question.
What's your hottest take?
Okay. Well, let's see. I think that people are underestimating still the potential of the agentic economy, right? I think there's going to be a world here soon where there's more AI agents than humans doing work in the economy. At some point we'll have humanoid robots in the mix on that, too. And if you think about AI as programmable intelligence and labor, and crypto as programmable money and markets, these things are actually perfectly complementary to create this new agentic economy, because how are AI agents going to hire each other and pay each other? They oftentimes have to do very frequent, very small transactions. They need to breeze through paywalls. They can't fill out a CAPTCHA. They can't open their bank account for themselves. They're going to need new financial infrastructure to make this really efficient, and that's what Coinbase has built now with the full stack. You know, we've got USDC, a trusted stablecoin. We've got the Base chain. We've got great payment APIs and self-custodial wallets. And we've got X402, which is an open standard we created for agentic payments. And so right now it's the leader in agentic commerce. Like, Base, USDC, X402 are leading.
How many AI agents do you guys currently have?
Well, so it depends how you count it. I mean, you know, if you're talking about full-time equivalent, like any given employee might be working with a dozen or more agents, right? So it should in theory be like this big multiple. You could argue it's in the hundreds of thousands of agents. If you now take it to say like, well, the equivalent of a 40-hour work week, it's probably in the thousands right now. I think we'll probably by the end of this year have more full-time agents working than humans. And of course, that's just allowing the human employees to get even more work done. I'm not really a believer in this idea that it's going to take away jobs. I think that AI takes away tasks and toil, and it allows people to just get even more work done. So it's a bright future.
You went into this a bit further in our interview, but you were able to arbitrage the costs of token maxing. So how did you figure that out, and what are you guys doing to set that off?
Yeah, well, I think at this point Coinbase is one of the most AI-enabled companies in the world, and you know, what we saw is that like many companies, our token budget was going up exponentially. But what we did is we actually put some relatively simple changes in place to route certain queries and prompts to more inexpensive models. Like, these open-source models are three to six months behind, and they're 99% cheaper. Okay, so I think we're going to be in a world here quickly where like 80% of the workload could actually go to 99% cheaper models. And then for the top 20%, they can still route to the most frontier model, you know, IQ maxing or whatever you want to call it. And even with some other simple things we did like just caching queries and setting reasonable defaults, that allowed us to have our token usage continue to grow exponentially, but our cost curve has really started to flatten. And that's really good. You know, our CFO loves that, but I think it's good for the world too, because it just means that these things are going to — the prices are going to fall much faster than Moore's Law, even like one of the prior technology trends. I think it's going to be even more dramatic.
Amazing. Okay, so to close out on a quick, happy, positive note, what are you most excited about today?
Well, there's so many things. I think the tokenized stocks are a great democratizing force. We talked about that. Pooling our global liquidity, which, you know, 80% of crypto trading has been in derivatives and perpetual futures that have moved offshore. Now with this approval we've gotten in the US, we can actually start to unify the US and international, bring a lot of this activity back onshore in a legitimate way — something I think only Coinbase can do. And then the agentic infrastructure for financial services. I think that's a super exciting opportunity.
Amazing. Well, thank you so much, Brian. Congrats on the big day.
Thank you for having me, Molly. I'm a huge fan.
So you're the CMO of Coinbase. Yesterday I interviewed Brian, and he mentioned you're now going to be able to access 4 billion new users. So what is the strategy there?
Yeah, I mean, it's pretty lofty, but I think we can do it. I mean, I think the next tranche of users can really be everyone and anyone who's looking for a better financial system. And what's cool is that it's not really about one thing anymore, right? Like, it's about earning more on your money, making better payments, like getting a better loan that's backed by crypto, right? The possibilities are endless for the stage that Coinbase is at, and we're really ready to make sure that Coinbase is the home for all of your finances, no matter what category they're in.
Since you're in charge of the vibes over here and making sure the brand is on top, how do you manage marketing and vibes through booms and busts?
Yeah, I mean, I think we're all pretty used to the cyclical nature of crypto at this point, but I think what's really interesting about working at Coinbase is that it's actually quite culturally embedded in the company. So you might be surprised to hear, but believe it or not, like our executives, they talk about how they prefer to operate through winters, right? And I think that kind of goes back to like a little bit of that grit that's embedded in Coinbase, but it really allows us to focus quite a bit more. And so there are benefits to it. And I think from a marketing perspective, you know, sometimes when you really got to batten down the hatches, it can actually breed some really cool creative. And so I love being able to basically use those constraints to breed more creativity, and just keep in mind that like crypto isn't all about prices, right? It's for the long haul.
I think you said a really good line before about pressure. What was that?
That's right, I did. I said that pressure builds diamond hands.
Wow. We could even just end this there. That's a great one.
So what are the biggest misconceptions about crypto today?
Okay. I think probably one of the biggest misconceptions is that crypto is down, down, down, right? I mean, there might be some elements that have been higher, but you're looking at things like stablecoins and prediction markets that are literally reaching all-time highs.
And so with that, how do you stay — I mean, you guys have been crushing it.
I actually tweeted about this because I've been taking note.
[laughter]
You guys have been crushing it lately with your creative. So how do you remain relevant for the next generation?
Well, I think luckily Coinbase is really built for the next generation, right? And the next generation doesn't want to use the same old stodgy financial institutions that their grandparents use, right? So these people were raised on the internet, literally, and Coinbase was built — finance built for the internet.
