Coinbase CEO: Cryptocurrency can open the next chapter of capitalism
The adoption and use of cryptocurrency have reached escape velocity.Author: Brian Armstrong, Coinbase CEO
Compiled by: 0xjs, Jinse Finance
In the United States, the public is voting for more economic freedom and free markets in the 2024 election for Donald Trump. Canada also seems to be following a similar path with Pierre Poilievre. Argentine President Milei and El Salvador President Bukele led this movement in Latin America in 2023. In the UK, Starmer is shifting towards supporting a tech and innovation agenda to attract more voters, while in Germany, Schultz is likely to be ousted soon due to poor fiscal policies leading to an economic slowdown.
We are at a critical moment in history: the world is beginning to recognize the dangers of big government, seeing how it harms the very people it claims to protect the most, and has never worked in practice. However, some are still moving in the wrong direction. China rose under Deng Xiaoping's free market policies.
Economic growth comes from free market capitalism, deregulation, small government, and technological innovation. Economic growth leads to lower prices, increased job opportunities, higher tax revenues, improved healthcare, and more. The best way to lift people out of poverty and create prosperity for all is not socialism, but free market capitalism. If other G20 countries wish to participate in economic prosperity, it would be wise to join the growing trend of embracing economic freedom and free markets.
At Coinbase, our mission has always been to increase the world's economic freedom. Just like freedom of speech or religious freedom, economic freedom is essential for a prosperous society and the advancement of civilization. We believe that cryptocurrency is the most important technology that can bring economic freedom to the world.
Everyone around the world cares about and should enjoy economic freedom. According to our survey, over three-quarters of adults globally express a desire for more economic freedom. This is not surprising, as it has been shown that economic freedom can increase happiness, improve literacy rates, enhance the environment, and many other positive social indicators (as reported by the World Bank, Pew Research Center, and the World Economic Forum).
However, economic freedom is declining, and the world economy is largely unfree.
Over the past 100 years, we have been on the right path—economic freedom has been on the rise, but the situation took a sharp turn for the worse in the early 21st century. The average global economic freedom score is currently at its lowest level since 2001. As a result, most economies around the world are largely considered unfree, and many are even repressed.
In the United States, this means that living standards are declining, and most people feel that the American Dream is unattainable. Only 14% of Americans are optimistic about the future of the financial system. Around the world, 70% of adults now say their children's economic situation will be worse than their parents'. The loss of economic freedom has eroded people's confidence in the system.
What is the reason for the recent rise of socialism? Why is this experiment continually being attempted? It seems there is something in human nature that is drawn to socialism, with each generation needing to learn the hard way. For some, this approach stems from a sincere desire to help others, yet they fail to realize that these policies harm those they claim to help. For others, they exploit the ignorance of people to gain power, or this practice stems from a deeper hatred of themselves or humanity.
Regardless of the reasons, history tells us that whenever we face challenges, we as a species can invent creative solutions. From the printing press to the steam engine, from electricity to the internet—each breakthrough has revitalized the economy, empowered people, and propelled civilization forward. Cryptocurrency is the next chapter in this story.
Cryptocurrency Can Open the Next Chapter of Capitalism: The Era of Economic Freedom
Coinbase's core argument is that the widespread adoption and use of crypto technology will increase economic freedom. This is based on the promise of a global economy driven by technology and people rather than governments, where anyone with internet access can participate, property rights are enforced, and currency retains value. This is not a dream. Crypto technology has already created more economic freedom for real people today:
Stablecoins: Stablecoins are poised to become the next killer app for cryptocurrencies, with transaction volumes increasing more than threefold year-over-year to approximately $27 trillion. Stablecoins are becoming part of people's daily financial lives, not just for trading, especially in emerging markets, leading the world in stablecoin adoption. 5 million Argentinians actively use cryptocurrencies for daily transactions and save in dollars, which is the second most popular use case in emerging markets.
Free Trade: Cryptocurrencies operate on a global network, free from intermediaries and national borders, thus facilitating free trade. L2 can now complete global transactions in 1 second for less than 1 cent, making cryptocurrency the only payment method that meets all three conditions: fast, cheap, and global. This brings unprecedented trade freedom to individuals and businesses. Sending cryptocurrency is instant, inexpensive, and without imposed restrictions—unlike traditional services, which are often regionalized and/or limited in transaction frequency and amount. Just ask people why they use cryptocurrency. A Visa study found that one of the primary reasons people in Australia, Brazil, Germany, Hong Kong, South Africa, the United States, and the UK use cryptocurrency is for transaction freedom and lower fees.
Property Rights: Cryptocurrencies achieve secure and enforceable property rights by replacing courts or intermediaries with code and cryptographic security. Governments are turning to cryptocurrencies to address the lack of housing/land ownership proof for over 5 billion people worldwide. On the blockchain, ownership is immutable, and smart contracts can be used to automate and enforce the rights that come with ownership. For example, Georgia is placing land records on the blockchain, and Sweden is testing a crypto system for land registration.
Permissionless Access: Cryptocurrencies are eliminating borders to build a more inclusive global financial system, allowing people to keep more of their hard-earned money and do more with it. Decentralized finance (DeFi) is revolutionizing access to financial services, providing equal opportunities for anyone with internet access (from rural entrepreneurs to 1.4 billion unbanked individuals) to participate in the global economy.
The adoption and use of cryptocurrencies have reached escape velocity. Nearly 7% of the world now owns cryptocurrency as people turn to it to solve real problems:
How to Increase Economic Freedom by 2025
World leaders and policymakers: It is time to embrace crypto + technological optimism to accelerate economic freedom and human progress. Here are four concrete actions you can take this year:
Ensure that cryptocurrencies thrive onshore through legislation. Cryptocurrencies are a novel and unique technology that should not be bound by outdated laws. Policymakers should focus on creating clear, forward-looking regulatory frameworks to nurture this innovation rather than pushing it overseas—otherwise, they may fall behind.
Establish a Bitcoin strategic reserve. It has been the best-performing asset class since its inception and has solidified its status as an inflation hedge. The next global arms race will unfold in the digital economy, not in space. Bitcoin could become the foundation of the global economy, akin to gold, and will be central to national security, as Bitcoin holdings can shift the balance of power between nations. Governments will compete to build strategic Bitcoin reserves to secure and enhance their economies, while countries without Bitcoin reserves will lose their footing in the digital age.
Support economic zones that allow builders to freely experiment with various big ideas. You can use sandboxes to experiment and innovate safely, allowing builders to learn by doing. We have seen this approach work well historically in cities like Shenzhen and Hong Kong, and new projects like Prospera have the potential to accelerate innovation by adopting crypto technology.
Improve government efficiency. Similar to what Milei and DOGE have done, we are re-recognizing that excessive big government does not effectively solve problems, and often the problem itself is the issue. No matter who you are or where you are, cryptocurrency is for you. Even if you do not own or use crypto-driven financial services, you will still benefit. Cryptocurrencies serve as a check on the power of the people, balancing harsh governments, overregulation, legal battles, rising deficits, and stifled innovation.
Everyone: We all should demand and build a path forward that makes builders, innovation, and free markets (rather than government) the driving forces of economic growth. We must embrace economic freedom. The advancement of civilization depends on it.
