The future of crypto, with Coinbase’s Emilie Choi

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0:49Emily shares insights from leading one of the most influential crypto companies through a time of constant and rapid evolution. I think you'll enjoy this.

1:10so glad you can join us i'm so happy to be here we've worked together for decades i know i have i have so many good memories of working with reed at linkedin i feel so lucky and all these these little bits come back to me when i'm working at coinbase where i'm like oh this is how reed described network effects this is why we didn't want to do this acquisition and And so I just feel very, very grateful that I got to work with you for so long. Likewise. And so let's start with when you joined Coinbase, it was not the obvious giant that it is today. It was kind of a, you know, kind of a, oh, that's an interesting technology project.

1:48I wonder exactly what its impact on society is going to be. What has that journey been like for you? Yeah. I had been at LinkedIn for nearly nine years and had been there when it was private, public, owned by Microsoft and had gotten to be on that journey. And I kind of felt like I needed a new challenge because I wanted something that would make me a little uncomfortable. And crypto was very hot. It was definitely not mainstream, but it was starting to like bubble up. And I met with Brian Armstrong, our founder and CEO, and I kind of just got shivers down my spine. I was like, I don't fully understand exactly everything here, but I feel like I have to be a part of it and I want to learn it.

2:28And so I joined basically at the top and then went like this. There were. That's Bitcoin price. That's Bitcoin price. There were like 15 new leadership members at Coinbase. We'd all come from different companies. None of us had worked in crypto before. None of us had ever worked together before. It's literally a case study in what not to do. Tempers flared, emotions rose. Like we would have these meetings where somebody would like storm out. I mean, it got really, really ugly. And I know for a fact that a lot of LinkedIn people were like, poor Emily, what on earth was she thinking? And I just kept my head down.

3:06My whole strategy in life is I'm not always the smartest person in the room, but I like to be with the smartest people in the room. And I looked around and the smartest people in the room - That's very smart. The smartest people in the room were delighted that it was a crypto winter. They were like, Balaji Srinivasan and Dan Romero and these people, they were like, yeah, this is the time we all build and all the mercenaries get out of the space. It's like the best time ever. And so I just put my head down and tried to help fix problems. I actually came in in a lateral move. So I was head of CorpDevitt LinkedIn and then head of CorpDevitt Coinbase.

3:38And at the end of my year, my first year there, which was really, really quite volatile, we came up for air and Brian promoted me to president and COO. And I think the board was like, hey, don't you want to get some big name out there. Like, you know, the company is in good shape now. Like there's a lot of options. And he was like, no, because Emily was there through the worst parts and she proved that she could actually operate during that. So it's through those things that you end up becoming stronger and getting rewarded in an outsized way, I think. Yeah. And very smart move by Brian. And so what are some of the operating lessons that you've learned from that switch?

4:16What are some of the kind of cadences that you would say because, you know, crypto is a very difficult regulatory. We'll get into that. Policy, we'll get into that. But it's like, what are the navigations and principles that you've developed in this? Yeah. So I've stolen a ton of lessons from you and Jeff, just to say it, because I've learned from the best. That's learning, but they certainly do. Totally, totally. So I believe very much in scaling processes early, scaling documents early. And the reason that I believe this is because if everybody knows the system when you're a little startup and then you grow bigger and bigger and bigger and bigger.

4:51Everybody can use that system and it can extend. So snarky people would say, oh, like a Rapid, which is a document we use for decision-making, that's so big company. And I have the exact opposite thing, which is if you have everybody using the same document for decision-making, you know how to get a decision made. You're not left kind of waiting for some passive-aggressive manager to make a decision. You have a system. And we try to do it with a 48-hour ETA of everybody puts their input into this document. There's one decision maker and they have to make the decision within 48 hours unless there's some extraneous circumstance.

5:25So I believe those things help you run a lot faster even if they feel a little office spacey. And Rapid is - It should have been more of a laugh. You do know what office space is, right? Maybe I'm dating myself, maybe. And we have documents like that. So Rapid is for decision-making. I think that's one of the most important things we have. We have another document called Problem Proposed Solution. So one of the other things I find happens in companies is that we all tend to complain about the way somebody else does something, but we're not willing to say it to their face. We say it behind their back.

5:54And at Coinbase, we don't believe in having political behavior. We believe you say it to the person's face. And the best way to do that is in writing. So maybe the head of HR, you're really irritated by their performance process and everybody's bitching about it behind their back. Okay, write it out. It should take five minutes to write out. Problem. I think our performance process sucks. These are the reasons why. Proposed solution. Why do you write the proposed solution? Because you don't just bring the problem. You actually have to bring a solution that you think is meaningfully better. You want to imbue the qualities of positivity and actually being constructive as opposed to just bitching about something.

6:28And similarly, another thing which Ben Horowitz espouses, which I think is fantastic, is shocking rules. So any company should have things known about it that are specific to the company. So here's an example. We once had an executive, we were writing up the values document and he was like, let's have collaboration be a key feature of our values. And I was like, what does that really even mean to you in terms of like, you think collaboration and somebody is going to know immediately that's Coinbase. I don't think so. And in some ways I actually think over collaboration, and this is something you taught me, like, I think it ends up adding a functional tax that I don't think is always right.

7:05So one of our really controversial, shocking rules was no politics at the office. And we launched that in 2020, we had a lot of haters. I mean, if you look back at the press now, it's shocking to read what other CEOs said and how people reacted. And I think now it's like a snooze fest. It's like a no-brainer. Everybody agrees that that was probably the right thing to do. But at the time, it was very known that it was like a Coinbase thing. And I think that it's nice to have shocking rules that help your team form a culture that they're really inspired by. I also believe in the concept of DRIs.

7:40So at Coinbase, it's a fireable offense to start a committee without explicit approval by Brian or myself. And the reason for that is that committees, I think, in general are like a way to diffuse responsibility instead of having one throat to choke. You can have people create input for this stuff. It's not my favorite expression. I'm realizing how I'm sounding in this, like a little hardcore, but it's true. Directly responsible. Yeah, a directly responsible individual, like the person who really owns it. And I think it creates autonomy. It helps empower a person. It also helps us look back. This is a Ray Dalio theory of like you can look back at data and see who is the one who actually made the right decisions most of the time and why.

8:24Like what does that tell you about that person? What does it tell you about wrong decision making? All that kind of stuff. And I could go on and on about this, but my other thing I have to throw out because I feel like it's such a LinkedIn thing that I learned, which was like talent is the number one operating priority, period. Like it should be for any great company. And you should think about how you tailor it to your company. So for us, we believe in cognitive and cultural tests and we give those assessments. We have a veto right by Brian or me for any new hire. We personally review every new person.

8:52And there's a packet and it kills the recruiters. It's an insane amount of information about the person's profile, how they scored on those tests, what would the interviewer feedback was, all that kind of stuff. And then we make a final decision. But it really is important that you care at that level, that you're still going to keep doing that even when the company is 5 ,000 people. And then similarly with performance management, how are you making sure that the lowest performers are managed out and that you're rewarding the highest performers? I think talent was the biggest thing I learned at LinkedIn.

9:21Yeah, absolutely. And Jeff, as we both learned, one of the masters. Before I move on, because you just triggered a question before I move to the next area, do you ever use AI for reviewing those packets of information on people? We do AI for performance management. And I think it's actually getting pretty good because when it can go through documents and look at people's inputs and what recommendations those people have made and what projects they've worked on, like it does save a ton of time. I haven't used it as aggressively in the hiring part of reviewing the packets. And actually it's a great idea.

9:54I don't even know why I didn't think about that. It's a great point. Yeah, because you've got a very thick packet. You're still going to look through it, but like highlight this or here's a place to pay attention to, et cetera. Totally. I love that.

10:07Still ahead, more from Reid's conversation with Emily Choi about the future of crypto.

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13:16Welcome back to Masters of Scale. You can find this conversation and much more from our 2025 summit on our YouTube channel. You know, some of the policies have been changing. Genius Act, describe a little bit of it, what it means for how crypto can then be more broadly adopted, you know, in the world and what it would mean for positive benefits for society. Yeah. So for those who aren't aware and aren't in the weeds of this, like I have been for the past several years, we had a very, very hostile administration for a while against crypto. And the SEC in particular took a really, really aggressive stance and was employing regulation by enforcement.

13:56And the problem with this is that we had no regulation. So they were just enforcing without any rules or playbook. And so the industry, the good players in the industry like Coinbase were begging for some type of regulation, like just give us the rules and we'll play by the rules. But don't just willy nilly try to like, you know, the SEC, for example, imposed a Wells notice against Coinbase. I still remember this day. I mean, our stock price went way down. It was horrible. And this was all the result of FTX, which was offshore, by the way, not playing by the rules. And they use that as an excuse to kind of go after the rest of the industry.

14:33So we decided to just employ a completely different playbook, which was extremely bold at the time. Every banking CEO told us this was the craziest, stupidest thing that they could possibly think of. But what we did was we made a direct appeal to our customers and to the world. So the day after we got this Wells notice, Brian and our CLO, our chief legal officer, Paul Graywall, went out and they recorded a video. And it was like, essentially, the story was we went public under the auspices of the SEC in 2021 with exactly the same business that they are now suing us for. So how are we supposed to know how to play by the rules if this is the way in which we operate?

15:12And this resonated like this is like a keep it simple, stupid argument for people who normally wouldn't really care, frankly, about crypto policy. But it's like, well, actually, that does seem a little messed up. And we did two different things. We did this bottoms-up grassroots campaign to make sure that the crypto voter, there's more than 52 million holders of crypto in the United States, was loud. And we tend to be a loud group, believe it or not. And then— I think that's news, but yes. Tops down, SuperPak, Fair Shake, which we wanted to show the heft of the industry as well. So we and A16Z and others partnered to create the SuperPak.

15:48Why this is relevant is because, whether you're in crypto or not, is because everybody in tech, including the AI companies, are trying to follow this model now because it was so incredibly effective. And so the first bill that was passed was the Genius Bill, which is a stablecoin bill. Stablecoins at this point, I think, are totally mainstream, super vanilla, like it's lower cost, it's easier, it's slicker. And so that kind of legitimizes the stablecoin world and how that's regulated. The second piece of this that we're working very hard for is market structure, which is just to show like, what does the CFTC versus the SEC oversee?

16:22What makes a digital asset a security? Like just, again, just give us the rules and then we'll play by the rules. And so I think the big message is when you don't have anything, a hostile regulator can really go after you really strongly. And so it is much better to make sure that you have a strategy where you're winning hearts and minds both with your vocal users as well as showing that you have power at the top. And I think it's been incredibly effective. So chart now for next X years, five, whatever, how the financial system will get stronger as people, as the whole financial system embraces the crypto world more.

17:02Yeah. So, you know, analysts always ask us like, what does crypto look like in five years? And I have no idea. But I think that what I think about is what are the benefits of crypto and how will they then feed the rest of the financial system and the app economy and so on? The benefits of crypto are it is truly global. So today, the way that the financial world is operating is very piecemeal, very national or regional. And that's the way the banking system works. And for anybody who's trying to send money cross-border, they are in a lot of pain because of the way that this system works today. It is 24-7.

17:41It is instant settlement. It is, most importantly in my mind, no middleman. So whatever you think about anybody, they should not be denied a bank account because of their beliefs or the color of their skin or their gender or anything like that. and there's been i mean in i was thinking about the uk example nigel farage was denied a bank account from a bank and the notes of the compliance officer again whatever you think of nigel farage it said something to the effect of like he was friends with jojkovic when jojkovic refused a vaccine and i think that that's what happens when you get humans in the way of these things and in many ways we want to automate many of these things and that's that's the beauty of crypto i think of it as the money of the internet.

18:28And the way that we think about crypto in terms of like the way it'll evolve is right now, it is a type of financial instrument or investment. In the future, it is going to completely disrupt the financial system. And in the other future, it's also going to completely disrupt the app economy. And one more thing on that is that when you think about the current relationship between the gatekeepers, you know, the really big tech behemoths, the players that they work with have no say in the way that they're taxed or levied taxes for their content whatever it is and crypto disrupts that and so like it is powerful and it does scare many people and you'll you'll see that sometimes when you like when you read a headline now and you might not be into crypto but when you read a headline now and you see maybe the banks are really upset about the way that the genius bill came down you'll understand that it's because there's fear about the way that economics are going to be moved to different parts of the ecosystem.

19:23Yeah. And specifically, it's like, well, the middle players, men, whatever, tend to be like taking a fairly healthy tax. There's a tax on the whole system. And the inability to command that tax because the system is more automated, whether it's how you might buy an app or pay for it or, you know, engage in other kinds of services, that's part of the crypto will make this much more seamless, much more empowerment of lots of people, et cetera. The customer should benefit. Yes. What do you think are the next steps for getting a broader, obviously we have a lot of people in the country who already hold crypto, but broader kind of engagement use, not just like, oh, I bought some, it's kind of like a, you know, kind of gold or a share or something else that I put in there.

20:07But like, what are the next steps for kind of a broadening engagement across consumers? So I think the number one utility case that has absolutely proven itself is definitely stablecoins. But to me, the hot consumer app right now is obviously prediction markets, which is another really cool form, I think, of how crypto is being employed. And I don't know, you mean Polymarket just had an incredible$2 billion raise from ICE, which is this super stodgy conservative exchange. CalShields, amazing. I don't think they quite describe themselves that way. CalShe is another amazing prediction markets provider.

20:46But I think you see how this stuff is transforming the way that we perceive and view content. The Katie Porter thing yesterday, I don't know if you saw it, but Katie Porter yesterday, she had the bad interview. And then immediately on CalShe, her chances of winning the governorship dropped like 50%. So you're seeing this live real-time thing in crypto that's super fun and I think a very compelling consumer use case. Is there anything, I don't know if you want to talk about the prediction markets at all, but I think it's both amazing and some things worry me about the prediction markets. It's not just like the kind of, frankly, I think gross thing that was happening with women's basketball games, but other kinds of things.

21:27Is there anything you've thought about how that should be shaped for maximum, for like increasing society benefit and decreasing some of the side effects? I think that you're absolutely right. Like Brian thinks about this a lot, which is how do we create less gambling behavior and more utility behavior? And how do we make this like just more oriented around content and a new form of content and media as opposed to purely speculation? I think one of the – I don't know if it's a bug or a feature of crypto. Crypto monetized very early. So, you know, you had Facebook and the others. they had engagement early, but it took a long time to monetize.

22:09Crypto had the opposite problem, and it created perverse incentives for rampant speculation. The thing with Coinbase, I will say, is that we've always tried to take kind of the right path on that. We leaned into compliance regulation early, even though it was absolutely not to our benefit in many ways. And we've always tried to play the long game. So we've been around for 13 years now. And so we are not always first to market on some of these things. And we're definitely, we don't have the highest leverage products or anything like that because we want, we do want to ultimately make sure that the consumer understands what they're getting into when they use these products.

22:43And you have to find that right balance. Well, I'm a Coinbase customer. Yeah, I love that. Yes. So say a little bit also about how crypto, like it's the money of the internet, but it's also kind of a platform that touches identity, digital assets. Your career has been the internet. It was, you know, it's Yahoo, LinkedIn, et cetera. So what are some of the things that you think is, so one was the financial sector on the internet and there's a platform for evolution. What are some of the things we could hope for in the next five plus years? I think tokenization, which is a key feature of crypto, is about ownership.

23:20It means that you have more ownership in the system. And I think when you think about the first era of the internet, it was read only. You were consuming static web pages. The second era was read write. and that was this is a christic's an idea i'm pawning it off of him but read right so the social networks and the thing with the social social networks were that you would put all of your valuable content into these different feeds and these profiles and you didn't necessarily derive as much benefit from them as the monetizers did the next era is read right own which is as tokenization happens you own that so content coins if you post a tweet that you you know like gets a lot of likes and is tokenized, like you will get paid for that in some ways.