Headshot of Paul Grewal over top of a gray lattice pattern

Insights from an afternoon with Coinbase, Inc.’s chief legal officer

Technology

Cryptocurrency and blockchain are emerging industries that many are interested to learn about. Paul Grewal, chief legal officer at Coinbase, Inc., shared insights about his experiences and the industry at large, as well as his thoughts on regulation and how the U.S., particularly Ohio, are well-positioned to become leaders in blockchain and cryptocurrency

Risk, compliance and regulation in the crypto industry

  • Cryptocurrency was originally conceptualized to be completely peer-to-peer, with no middleman. However, for mass adoption and use, a certain amount of centralization and regulation is necessary.
  • In the U.S., there is a lack of regulation and definition of what a cryptocurrency asset is and how companies in the industry should be categorized. As a result, crypto exchange companies often find it difficult to operate and fulfill requests from the Securities and Exchange Commission (SEC).
  • There is an industry-wide challenge and lack of clarity with compliance. Grewal shared that Coinbase decided early on to “design everything under the law and regulations,” and they have invested greatly in compliance measures.

Current national and global landscape

Fifty-two million Americans have bought or used cryptocurrency, and the industry is growing quickly.

  • The Congressional bill “Financial Innovation and Technology for the 21st Century Act” would establish a framework for digital assets. This bill has bipartisan support, and companies and customers are hopeful this is a first step toward a more regulated environment.
  • In the U.S., cryptocurrency is only one of many issues that elected officials are facing, and there is a lack of understanding the basics of the industry. Grewal noted, “Regardless of your opinion on crypto, you need an informed opinion to regulate.”
  • Globally, both the blockchain and cryptocurrency industries are moving forward. In much of the world, access to dollars is very difficult and inflation is steep and variable. Digital assets and crypto have the potential to keep peoples’ income stable in less stable economies.
  • The questions for the U.S. are, “Are we going to hop on board?” and “Where does the U.S. want to be positioned in 30 years in these industries?”

Ohio: The next Silicon Valley?

Coinbase has over a million active users in Ohio. With recent investments by Intel, Amazon, Google, Meta and others, the state is well-positioned for tech companies to expand and advance their operations.

  • Ohio has an incredible education environment and is poised to not only consume education around new industries like blockchain and cryptocurrency but to be producers of that education.
  • Grewal shared that in his work with state legislators around the nation, “Ohio is a place where people still talk across the aisle,” and bipartisan legislation is possible
  • A variety of industries across the state, from the medical industry to artist collectives, are interested in blockchain and cryptocurrencies.