Coinbase's "Ambition": Bringing Startup Financing Across the Entire Lifecycle "On-Chain"

Cryptocurrency exchange Coinbase is ambitiously seeking to reshape the way capital is formed through blockchain.

Recently, Coinbase CEO Brian Armstrong stated on the TBPN podcast that, through blockchain, founders can register companies, conduct seed funding rounds, 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 could "increase the number of companies engaging in financing and entrepreneurship."

Wall Street reacted positively. JPMorgan upgraded Coinbase's stock rating to “Overweight” last week. Coinbase's stock price rose about 10% at the close last Friday.

Leveraging the Echo platform to build an on-chain financing ecosystem

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

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

Armstrong stated: “If we can connect great entrepreneurs with investors who hold capital, we’re the perfect platform to help accelerate this process.” He added that with on-chain smart contracts, startups would no longer need banks or lawyers to handle global capital transfers.

Challenging regulatory rules and seeking 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 on-chain financing access.

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

He said Coinbase hopes “to find the right balance between consumer protection and opening these opportunities to retail investors,” suggesting the company’s intent to change existing market access barriers.

JPMorgan optimistic about Base network’s potential

Coinbase’s on-chain strategy is closely linked to the development of its Layer-2 network Base, which has become a key reason for the bank’s optimism about the company’s prospects.

According to a report released by JPMorgan last week, the bank’s upgrade of Coinbase’s rating is based on the tremendous growth potential of its Base network and the revised USDC reward policy. Analysts noted that Coinbase is “devoting itself” to its Base blockchain to capture more value from platform expansion.

Analysts at the bank estimate that if Base issues a token in the future, it could create a market opportunity worth $12 to $34 billion, with Coinbase's share valued between $4 and $12 billion.

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