JD Durkin: Our next guest joins me live here on the trading floor of the New York Stock Exchange. Say hello to Brett Tejpaul, Co-CEO at Coinbase Institutional. Really grateful for your time. Thanks for chatting with me today.
Brett Tejpaul: Great to be here, JD.
JD Durkin: Let’s start with a few of the biggest things that Coinbase Institutional has rolled out lately and some of the top-line impacts here on Wall Street.
Brett Tejpaul: Well, the biggest thing, which we launched just Monday, is our entry into the U.S. IPO space. So I’m thrilled to announce that we’re launching with Aura. I’m actually wearing one here. And so that is now live and available on Coinbase Retail. And so you can go in there and subscribe to the offering. I think it closes Friday night, and we’re off to a great start.
So that’s one big thing. The second big thing is tokenized stocks. So Coinbase has a particular type of offering where it’s the actual U.S. stock. So it’s not a derivative or some other type of contract, which is differentiated from the other types of products.
We listed our first in Abu Dhabi in ADGM. We’ve got 10 stocks live. It’s the names you would expect, so Amazon, Strategy, Microsoft, etc. And we’re going to scale that to hundreds and then thousands. And so it’s a really exciting breakthrough for the overall business.
Coinbase Institutional, you’ve known that we’ve been around here for quite some time. And, you know, six or seven years later, we’re the dominant provider for all the asset managers and hedge funds. And, you know, I can’t help but mention BlackRock and the enormous success we had with the ETFs.
So we have a big prime brokerage offering. We can buy, sell, store, stake, finance, and all the things that one wants to do with traditional assets you can now do with crypto.
JD Durkin: Let me follow up on the tokenized versions of some of those names you mentioned. Strategy, I believe you’ve got Apple and Nvidia, Tesla. These are some of the flashiest, most popular names for retail investors out there.
Given that these are tokenized versions of those names, what does that actually mean for the investor out there? What changes?
Brett Tejpaul: It’s a great question because I’m a derivatives guy and have been a structured products guy and all that, but sometimes simplicity is really what investors want. And what they wanted was a token that easily represents the stock itself.
And so what Coinbase has created is a U.S. stock held in a custodian, and where the issuance of that token just is the ownership of that stock. It’s that simple. And with it, you get things like, you know, dividends and all the shareholder rights that you would hope to have.
JD Durkin: So let me ask you about the upcoming Aura IPO. It’s nearly a $16 billion listing, and you opened IPO allocations to retail. For far too long, right, you know as well as I do, retail sat on the sidelines. They said, “I want in on the action early.”
How did this actually come together, and what does it mean now for retail as opposed to just institutional money?
Brett Tejpaul: Well, it started with Brian Armstrong, our founder, and he came out at the end of last year with this vision of Coinbase being the Everything Exchange. And so the Everything Exchange is manifesting. It’s manifesting in this moment.
And so one of the things he wanted to do is have tokenized stocks, but not just that. He wanted to open up what was previously closed. It’s hard. Not everyone gets—do you get invitations to everything as it breaks in the day? You don’t.
And so it’s a really important point to sort of break the stranglehold that we’ve had with a narrow set of people being offered those IPO offerings. And so not only is it tokenized and you can travel with it and do different things, but it’s super exciting.
I just want to clarify one point. Aura itself is actually a regular IPO, so it’s not tokenized. But the other stocks that we listed in ADGM are.
JD Durkin: Yeah, which, I mean, really exciting developments, no doubt, for Coinbase Institutional. Stocks on-chain. We’re talking IPOs on an app. Where do you see this convergence between crypto and TradFi going from here?
Brett Tejpaul: Oh, great question. So the first manifestation of TradFi meeting crypto in really big scale was actually the ETF moment. So that was the fusion, if you remember, sort of, you know, going through your normal brokerage and buying something, settling the next day. But then crypto is real-time, 24/7. So the ETF was like the manifestation of both of those worlds coming together.
The second move is with tokenized stocks. It’s actually the thing. So it’s the next big progressive step in bringing these two worlds together.
And the third step, which is manifesting right now, is stablecoin payments. So we’ve got a couple of big announcements coming with some really big banks. So one stat I’d love to share with you is that of the top 20 largest banks in the world, we’ve got seven of them signed up to use Coinbase infrastructure.
And many of them are looking at stablecoin payments and using things like USDC, which is our preferred token.
JD Durkin: There you go. Wow. You guys are booked and busy. Congratulations on all these rollouts, and come see us as they continue to break and develop. It’s nice to see you here today.
Brett Tejpaul: Great to see you.
JD Durkin: Brett Tejpaul, Co-CEO at Coinbase Institutional. My man, come back anytime.
