Coinbase's "Ambition": To Finance the Entire Lifecycle of Startups "On-Chain"

Cryptocurrency exchange Coinbase is ambitiously trying to reshape the way capital formation occurs through blockchain.

Recently, Coinbase CEO Brian Armstrong stated on the TBPN podcast that through blockchain, founders can register companies, conduct seed round financing, instantly obtain USDC stablecoin capital, and ultimately go public directly through equity tokenization.

Armstrong believes this move will make capital formation "more efficient, fairer, and more transparent," and may "increase the number of companies seeking financing and entrepreneurship."

Wall Street reacted positively to this. JP Morgan upgraded Coinbase's stock rating to "overweight" last week. Meanwhile, Coinbase's stock price rose by about 10% at the close last Friday.

Building an On-Chain Financing Ecosystem with the Echo Platform

The core of achieving this vision lies in simplifying the current "quite cumbersome" financing process. Armstrong stated that Coinbase will leverage its recently acquired financing platform Echo to achieve this goal. Reports indicate that Echo has already helped over 200 projects raise more than $200 million in funding.

According to the plan, Echo will initially operate independently but will gradually integrate into Coinbase's ecosystem. This move aims to directly connect entrepreneurs seeking funding with the $500 billion in assets held by Coinbase and its global investor base.

Armstrong said, "If we can connect great entrepreneurs with investors holding capital, we are the perfect platform to help accelerate this process." He added that through on-chain smart contracts, startups will no longer need banks or lawyers to handle global fund transfers.

Challenging Regulatory Rules for Broader Market Access

A key aspect of realizing this blueprint lies in regulation. According to Armstrong, Coinbase is working with U.S. regulators to promote broader access to on-chain financing.

He specifically pointed out that the current accredited investor rules are "unfair in many ways," as they exclude many individual investors from early investment opportunities.

He stated that Coinbase hopes to "find the right balance between consumer protection and opening these opportunities to retail investors," suggesting the company's intention to change existing market access barriers.

JP Morgan Optimistic About Base Network Potential

Coinbase's on-chain strategy is closely tied to the development of its Layer-2 network Base, which has become an important reason for investment banks to be optimistic about its prospects.

According to a report released by JP Morgan last week, the bank upgraded Coinbase's rating based on the enormous growth potential of its Base network and the revised USDC reward strategy. Analysts noted that Coinbase is "fully committed" to its Base blockchain to capture more value from platform expansion The bank's analysts estimate that if Base issues tokens in the future, it could create a market opportunity valued between $12 billion and $34 billion, with Coinbase's share valuation ranging from $4 billion to $12 billion