Coinbase goes on offense

#Web3Weekly: Feb. 26 to March 4, 2023

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Coinbase has begun pushing back hard against crypto’s battered reputation and uncertain regulatory outlook, especially in the U.S. But will it work?

The exchange announced a new grassroots lobbying campaign on Tuesday, including a national petition drive, to influence pending crypto legislation in Congress. Coinbase has also been touting a recent poll by partner Morning Consult showing widespread mistrust and discontent among Americans regarding the traditional financial industry.

Armed with that polling data, Coinbase CEO Brian Armstrong sunnily touted crypto as a necessary “update” to the U.S. financial system in television interviews Thursday with Bloomberg and CNBC, as well as in an essay on the latter’s website.

At first glance, it might be easy to dismiss all this as predictable political axe grinding. But it somehow feels more significant to me, to be frank.

Look, Coinbase is by far America’s largest publicly traded crypto company, with a market valuation near $12 billion. It’s like crypto’s version of the Big Board or Goldman Sachs, to use Wall Street as a shorthand reference. Hence what Coinbase says on issues like the above matters for the entire industry, like it or not.

The week’s other notable headlines:

• Shares of Silvergate crashed after the publicly listed crypto bank delayed filing its annual report late Wednesday, citing Crypto Winter-related struggles that may threaten its ability to remain in business. Clients have been closing accounts, and fears of a broader contagion akin to last year’s post-FTX fallout simmered, weighing on the broader token market. Bitcoin fell nearly 5% on the week.
• Reuters reports that Visa and Mastercard are putting their plans to expand crypto payments on hold.
• The Bureau of International Settlements says banks around the world cut crypto exposure by 44% last year.

“Coinbase’s Axe” by Peter A. McKay × DALL·E

• Venture investment in web3 has fallen sharply in the first quarter of 2023, according to Crunchbase data. So far in the period due to end March 31, about $1.7 billion has flowed into web3 startups across 233 funding rounds for those companies. At that pace, the industry will likely fall far short of the $2.7 billion that was invested across 373 deals in the fourth quarter.
• The popular gaming platform Unity is adding support for 13 blockchain-based software developer kits, including MetaMask’s, Solana’s, Algorand’s, and Solana’s. The move paves the way for new web3 features to be added to Unity-based games.
• Bank of America analysts issued a bullish report praising Starbucks’ early experiments with NFT-based customer rewards.
• Ten major Japanese companies are partnering to create a new “metaverse economic zone.”
• The French National Assembly passed new registration rules for firms offering crypto services. The bill, which President Emmanuel Macron is expected to sign into law shortly, is intended to coordinate French law with broader rules expected to be passed by the European Union’s parliament in April.
• The Bank of England’s deputy governor said in remarks to a parliamentary committee that issuance of a digital pound could “open up a new frontier in how money is used.”
• The startup Casetext launched a new AI app called CoCounsel designed to help lawyers crunch data, vet documents, and perform other specialized tasks.
• A Texas home is being sold as an NFT on the Solana chain.
• The New York Times claims to have found “the world’s most honorable bank robbers.”. They’re depositors who are frustrated by Lebanon’s recent economic crisis and are resorting to violence to withdraw their own money.

That’s it for now. Thanks for reading the newsletter today! If you want to receive updates like this in your inbox every Sunday, please join our email list.

Note: #Web3Weekly content is intended for journalistic purposes only, not as investment advice. Always DYOR and consult appropriate financial professionals before making investment decisions.

Best wishes for a healthy and productive week ahead.