Coinbase is exploring issuing coins, ultimately wanting to become a new type of "bank"?

In today's world of drastic changes in the global financial landscape, the crypto asset giant Coinbase is making a series of striking moves to announce to the world that it is no longer satisfied with merely being positioned as a digital asset exchange. From its CEO Brian Armstrong publicly stating the ambition to become the "primary financial account" for users, to exploring the possibility of issuing a native Token through its self-developed Layer2 network Base, every step Coinbase takes resonates with the industry.

This series of actions raises a core question: does this leader in the Crypto Assets world want to delve deeper into the depths of Web3, or is it aiming to disrupt traditional finance across industries, ultimately becoming a new type of "bank"? The answer may be more complex than imagined, as this is a grand strategy of horizontal expansion and vertical integration running in parallel.

The ambition of "super apps"

"We hope to be an alternative to people's banks, to become their primary financial account." Coinbase CEO Armstrong did not hide his ambitions in a recent interview. The blueprint he envisioned is a "super app" that goes beyond traditional exchange functions, a comprehensive platform that seamlessly integrates all financial activities of users, such as spending, saving, payment, and investment, on top of the "encryption rails."

This vision is not just empty talk. Coinbase has already started to lay out its plans; its launched credit card offers up to 4% Bitcoin cashback, directly challenging the traditional banks and card organizations' transaction fee model of up to 2-3%. Recently, Coinbase has also launched the first derivative product listed in the United States that combines traditional finance with digital assets – the "Mag7+ Crypto Stock Index Futures." This product cleverly packages the stocks of seven tech giants like Apple and Microsoft, Coinbase's own stock, and BlackRock's Bitcoin and Ethereum spot ETFs together, providing traditional investors with a familiar yet novel entry point, undoubtedly a key step in building the bridge between TradFi and Web3.

Armstrong believes that all of this is feasible because the underlying encryption technology provides faster and cheaper settlement methods. However, the road to "bank alternatives" is fraught with challenges. First, there is strong resistance from traditional banks, which are actively lobbying regulators in an attempt to restrict innovations such as stablecoin rewards to protect their existing payment business. Secondly, Coinbase itself is also facing criticism from users regarding its customer service, from complaints on social media to the account recovery controversy involving celebrity Kevin Durant, all of which show that to become a "primary account" trusted by users, Coinbase has a long way to go.

Nevertheless, Coinbase's determination is evident. Its strategy resonates with the "comprehensive financial platform" vision of its competitor Robinhood, indicating that leading fintech companies are collectively expanding from a single trading function to a full range of everyday financial services.

Base exploration issuance

While reaching out to the traditional financial world, Coinbase has not forgotten its crypto-native base. Its self-built Ethereum Layer 2 scaling network—Base, is rising at an astonishing speed, becoming a crucial part of its strategic layout.

Since its launch, the ecosystem of the Base network has experienced explosive growth. According to data, its Total Value Locked (TVL) has exceeded $5 billion, with a total of over 2.9 billion transactions processed and monthly active users reaching as high as 18.7 million. More notably, Base network leader Jesse Pollak officially announced at a recent conference that Base is exploring the possibility of issuing a native network Token, aiming to accelerate the network's decentralization process.

This news has completely ignited the enthusiasm of the community, but it has also sparked new controversies. The biggest "centralized" concern regarding Base is that its sequencer is exclusively controlled by Coinbase, which means that the power to sort and package transactions is concentrated in a single entity. Some critics have thus labeled it as an "unregistered securities exchange," expressing concerns about the potential risk of a "Rug Pull."

In response to doubts, Ethereum founder Vitalik Buterin publicly defended Base. He pointed out that, according to ratings from third-party platforms such as L2 Beat, Base has reached a "Stage 1" level of decentralization, on par with mainstream L2 networks like Arbitrum and Optimism. Within this framework, even if users cannot submit transactions through a centralized sequencer, they can still enforce withdrawals through the mechanism of the Ethereum mainnet, meaning Coinbase "cannot steal users' funds." Vitalik praised Base for "doing things the right way," stating that the security it provides is tangible and protects users from malicious actions. Jesse Pollak also promised that the team is actively working towards a higher decentralization goal of "Stage 2."

Exploring the issuance of tokens is a key step in realizing this commitment to decentralization. A native Base Token can not only serve as a governance tool, gradually transferring control of the network to the community, but also become a powerful economic incentive to attract more developers and users to join the ecosystem, thereby providing a continuous stream of innovative applications and content for Coinbase's "super application."

grand financial narrative

By combining the vision of "super apps" with the exploration of token issuance on the Base network, Coinbase's strategic intentions become exceptionally clear. This is not a case of internal conflict, but rather a meticulously designed dual-track parallel strategy aimed at creating an unprecedented financial empire.

Horizontal expansion: Using "super applications" as a vehicle, Coinbase is attempting to break through the barriers of Crypto Assets and enter the vast traditional financial services market. It aims to capture users' complete financial lives, from daily payments to long-term investments, directly competing with traditional banks like JPMorgan Chase and fintech giants like PayPal. Products like the Mag7 index futures are excellent examples of its efforts to attract mainstream users and lower cognitive barriers.

Vertical integration: With the Base network at its core, Coinbase is building and controlling the underlying infrastructure for the future of financial services. Having its own "encryption rails" means lower costs, higher efficiency, and greater autonomy. A potential Base Token will become the "lifeblood" of this ecosystem, lubricating and incentivizing the growth of the entire network, ultimately forming a powerful, self-sustaining closed loop.

These two lines complement each other. A thriving Base ecosystem can provide a rich and diverse array of decentralized applications (dApps) for "super applications," allowing users to not only trade on Coinbase but also experience various Web3 innovations such as DeFi, GameFi, and SocialFi. Conversely, the large user base and convenient fiat deposit and withdrawal channels of the "super applications" can also bring a continuous flow of traffic and funds to the Base ecosystem.

Therefore, back to the original question: Does Coinbase ultimately want to become a bank? The answer is that its goals are far grander than simply becoming a traditional bank. What it is trying to establish is a brand new species: a "super app" that offers convenience and centralized services similar to a bank at the user interface level, while possessing the decentralized, transparent, and efficient characteristics of blockchain at the infrastructure level, creating a new type of financial platform.

This road is undoubtedly full of thorns, with the Damocles sword of regulation hanging high, the encirclement and blockade by traditional giants, as well as the improvement of its own service capabilities, all being huge tests. But regardless of success or failure, Coinbase's transformation this time heralds the arrival of a new era - the Crypto Assets industry is moving from the periphery to the center, evolving from mere asset speculation to a deep restructuring of the entire financial system's infrastructure.