Coinbase CEO: Millions of Tokens Launching, What’s Next For Exchanges?

Gone are the days when listing on Coinbase sharply moved prices. Back then, Coinbase was the most dominant crypto exchange, allowing traders, mostly in the United States and some parts of Europe, to swap only a few coins. Initially, before they changed tactics, Coinbase listed Bitcoin, Ethereum, Ethereum Classic, XRP, and Litecoin.

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Times Are Changing: Adapt Now Says Coinbase CEO

It was known that if there were rumors of Coinbase listing a specific token, and the exchange ended up approving and eventually adding it to its coveted list, valuations would sharply rise. That was the “Coinbase Effect.” Looking at what Brian Armstrong is suggesting, this era is now a thing of the past.

Valuations are spiking, and Donald Trump wants to make America the home of this thriving industry. As regulations shift in favor of crypto, Armstrong is also aware of how the game has changed. For this reason, taking to X, he thinks Coinbase should rethink its listing approach.

https://twitter.com/brian_armstrong/status/1883329603239899346

Acknowledging that millions of tokens are created each week, thanks in part to the expanding blockchain tech and the multiple launchpads like Pump.fun where thousands of tokens are launched every day, Armstrong recognizes that the way they vet and approve coins is now impractical.

The exchange has a six-step application process for listing new tokens. This approach, characterized by rigor, is outlined in their Digital Asset Framework and seeks to ensure that projects are secure, and their respective tokens comply with existing laws and market standards. Although this review process is effective, the thousands of tokens going live every week render it impractical.

Let The Community Take Charge, Thousands Of Meme Coins Launching

Accordingly, Armstrong is emphasizing urgency, thinking of ways to overhaul this system. In his view, exchanges should introduce a system where they simply “allow” or “block” a token, with a more emphasis on fluidity.

Whether a token is “blocked” or “allowed” will depend mostly on customer reviews and blockchain scans where quality is paramount. If this is the way, it may prove to be scalable and adaptable to changing market needs. It is especially so now that most swapping is on DEXes like Uniswap and Raydium.

Most meme coins lack the “quality” needed to be listed and traded on some exchanges. These tokens exist for entertainment purposes. Moreover, most may even qualify as securities if the strict laws of the United States Securities and Exchange Commission (SEC) were to apply.

However, some, like PNUT and PEPE, for example, have found success, commanding billions in market cap. Due to community demand and rising valuation, they have been listed on exchanges like Binance and KuCoin. Even so, evaluating their legitimacy is proving to be a hard nut to crack for exchanges like Coinbase.

Though there are meme coins that are truly community-centric, others are proving to be cash grabs. For example, the “Hawk Tuah Girl” token ended up dumping hard as the founder rugged the project.

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