A master plan for the future of finance

As with any investment, your capital is at risk.

Picture the early days of the internet: clunky dial-up modems, clumsy websites, and only a vague sense of – beneath the hype – what it was all actually for. Yet it was during this period of frenzied experimentation that the foundations of the modern digital economy were laid.  

The crypto industry – a catch-all term referring to the ecosystem of cryptographically secured digital assets - has felt similarly messy and oft discredited. Yet beneath the hyperbole and headlines, Coinbase has been quietly building the infrastructure that is transforming the financial system. 

When Coinbase was founded in 2012, it was little more than an exchange for trading Bitcoin (the original digital, or cryptocurrency). This was always just a stepping stone in a much bolder vision. In 2016, Coinbase’s founder, Brian Armstrong, shared what he called his 'Secret Master Plan’. A roadmap to achieving the company's mission of increasing economic freedom by helping to establish a new open financial system. One where assets can be transferred globally, instantly, and essentially for free. Armstrong’s master plan was simple, comprising just four steps: establish the protocols, build the infrastructure, develop a consumer interface, and unlock mass adoption.  

Since then, Coinbase has progressed admirably through the first three phases of the master plan, evolving to become the trusted gateway between the existing financial infrastructure and the fast-growing digital asset economy.  

At its simplest, a software protocol is a rulebook that computers follow to exchange information. Cryptocurrencies such as Bitcoin and Ethereum are examples of such protocols – agreed-upon systems that allow people to send value securely, just as email protocols enable the sending of messages. Completing step one enabled Coinbase to build its business on top of these rulebooks, offering a safe way to buy and hold these assets.  

During step two, the company rode the wave of broader crypto popularity and adoption. However, Coinbase actively positioned itself as a leader in regulatory advocacy. Amongst its crypto peers, Coinbase could be described as a teacher’s pet in an unruly classroom. This decision to embrace regulation and security set it apart. With over 100 million users worldwide and over US$400 billion worth of assets under custody, Coinbase has become the custodian of choice for everyday investors and institutions. With competitors undone by regulatory failure, Coinbase’s embrace of safety and legitimacy has become a competitive moat, not a burden. 

If the mission is clear, the exact path forward from here is less so. Armstrong readily admits he cannot predict which innovations will gain traction, so Coinbase embraces uncertainty with a culture of internal entrepreneurship. Around 10 per cent of resources are set aside for ‘venture bets’, reflecting a strategic desire to have many irons in the fire.  

This entrepreneurial culture is bearing fruit. In 2019, over 80 per cent of Coinbase’s revenues came from notoriously volatile retail trading fees. Since then, the company has intentionally pivoted towards recurring revenue streams. The clearest example is Coinbase One, a monthly subscription service that provides members with perks such as 0 per cent trading fees. Coinbase One cannibalises transaction fees but converts them into stickier, high-quality, recurring revenue streams.  

Stablecoins, digital currencies backed by traditional currencies like the US dollar and designed to maintain a stable value while offering the benefits of digital transactions, are another area of opportunity which is already maturing into real-world use cases. Together with Circle, Coinbase launched USDC, a digital dollar that has become one of the world’s most widely used payment tokens.

The economic model is simple but powerful, with Coinbase earning a share of the interest income on the reserves backing USDC. During 2024, stablecoin transaction volume overtook the amounts enabled by both Visa and Mastercard. No longer just a niche experiment, but a financial system operating at a globally significant scale. As circulation has grown, so too has Coinbase’s revenue from stablecoins – about 15 per cent of total sales today, up from zero in 2019. 

The market views Coinbase primarily as a volatile trading exchange tied to crypto price cycles, but its earnings profile is evolving into something far more resilient than the market appreciates. A company building the plumbing of a new financial system, Coinbase is maturing into a diversified financial infrastructure company, spanning a stablecoin payments network, institutional custody services, and subscription services like Coinbase One.

While success still depends on broader crypto adoption, growth is increasingly driven by the steady migration of assets from traditional finance into digital form. Longer term, only around 0.5 per cent of global GDP currently moves through the crypto ecosystem. A shift to even 2-3 per cent would be transformative – and Coinbase, with its scale, trust and expanding suite of recurring-revenue products, is exceptionally well placed to benefit. 

Risk factors

The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.

This communication was produced and approved in September 2025 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.

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