The Breakdown - EXCLUSIVE INTERVIEW: Binance US CEO Catherine Coley Announces Staking

Episode Date: January 29, 2020

In a Breakdown exclusive, Binance US CEO announces that the exchange will begin supporting staking, starting with ALGO and ATOMs.  On this episode, Catherine and I discuss: How the company prioritizes both new features and which audiences to build for Why staking is important both for allowing people to do more with their crypto assets as well as help build and secure the networks those assets run on  How staking is part of a much larger mission around education, financial literacy and lowering the barriers to entry for participation in crypto.

Welcome back to The Breakdown, an everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond, with your host, NLW. The Breakdown is distributed by CoinDesk. Welcome back to The Breakdown. It's Wednesday, January 29th, and today we have a very special guest, Catherine Coley, the CEO of Binance U.S. Binance U.S. has just announced they will be adding staking to the platform. And I invited Catherine, on to talk about not just the news itself, but the broader philosophy of how Binance U.S. thinks about the market right now, why they're interested in adding staking, and what their goals are for the year to come. For me, staking is interesting as it represents two things. One, it's a way for people to get yield, get value from their crypto assets without having to

buy and sell and trade them. Second, it's a way for people to actually participate in securing the network. In this way, I see staking as something that is both the natural evolution of the space, but which is also a fulfillment of the original goals and the motivations of decentralization that pulled so many people into this space. At the same time, I think that the biggest barrier to participation in networks through staking is going to be around U.X and high barriers to entry. And so I think it's particularly interesting when an actor like Binance comes in and actually gets involved. By the end of this interview, Catherine and I are really not so much focused on staking, but on this broader idea of lowering the barriers to entry and what it means in terms of where our goals should be for 2020.

All right, I am here with Catherine Coley, the CEO of Binance U.S., Catherine, thank you so much for joining us today. Thank you. excited to be here. Yeah, so I guess we're going to get into some exciting news. That's kind of the point of this, and we'll talk a bunch about it. But first, just for folks who have been following along and watching the evolution of Binance's efforts in the U.S., can you give us a little bit of the story about what's happening right now?

Sure. So for folks that are coming into understanding who we are and what we do, Binance U.S. was launched in the end of September of last year to really bring. bring the globally trusted technology of trading to an American user. So we're providing a fast and convenient platform that allows you to buy and sell and trade digital assets here in the United States looking after our users with their needs in mind. So when we think about what we've launched since September, we've added 28 coins and have now rolled out a one-click buy-sell feature so you don't have to leave market orders.

You can just buy Bitcoin buy coins directly. And then we've also rolled out most excitingly in 2020 our app. So we have Android and iOS app available now. It's been a busy start, but lots to catch up on. This is a highly contested market, obviously. It's one of the most important growth areas. I think the Block and Blockchain Association just did a survey where they found that something like 85% of people who are employed by the blockchain

industry are in either exchanges, mining operations, or in development. So obviously one of the major, major growth areas, how do you think about which features you prioritize, right? Because the wish list of users has to be like a mile long. Absolutely. And you can't just listen to the loudest voices. Sometimes the loudest ones might just be standing, you know, with a megaphone. So we really have to understand who our users are, how the U.S. has been able to grow and really what areas within the blockchain ecosystem are their strengths. So we really look quite focused on the utility cases that we find inside of the U.S. market, as well as the budding and growing and vibrant communities of certain crypto asset classes that are really passionate. So within the United States,

we've been able to see such a strong case for quite many of the digital assets. And then being able to provide that to U.S. users in the ways that they need to access digital assets is kind of we cater it. So mobile apps are clearly the future for not only the U.S., but quite largely adopted globally. So that's where we're kind of keenly focused on being able to deliver something in the palm of your hand gets you access to this digital era. When you're thinking about your target user, aside from everyone who's touching crypto, right, right now, what do you guys think about? Just above the 18, yeah. It's even gets me scared because I'm seeing technology.

be adopted earlier than that. And I want to make sure we're not, we're not losing out on being able to teach people, educate them earlier on, because I think just that education component can never start too soon. That's kind of where I was going with the question is when you guys, how are you prioritizing or thinking about the market right now, right? Is it just about capturing existing crypto community members who are already actively trading or just, you know, occasionally want to trade? Is it thinking about how to expand the audience? I guess it's just, you know, this is such a it's one of the industries that has the most constantly in flux user bases in terms of both who they are and in terms of what they're looking for. So I'm interested in how you guys prioritize

your audience as well as the features, I guess. Yeah, it really helps if you zoom out. So if instead of looking at, you know, what's the next feature that I can list or launch and what coin can I list and launch in the next, you know, two weeks or one week or so, and think about how can we provide financial confidence to people through digital assets, that really helps us align how we can go down this path appropriately. So when I'm talking about financial confidence, it's the ability to own and manage and grow your own capital in a means that you're both confident and understanding in it and also super in charge of it, which is what digital assets really provide, that equalizing force that lets you determine how you're going to be allocating

and understanding where your commitment and involvement in this space can really be. So we think crypto literacy is by far kind of the first phase and step. And then the second one would be access functionality. And then the third phase of it is, you know, how can we expand upon this and really build out an ecosystem? So we're pretty excited about the upcoming news because that is kind of entering in a different phase of what we can be providing people. Yeah, so this is the perfect segue. I'd love to hear and have you share a little bit about what's coming next and maybe how you guys decided that this was the next phase, I guess, of expanding how people get to interact with

their money with their assets and have more autonomy over that. Yeah, well, if you follow me on Twitter or follow our Twitter at Binance America, you'll notice that we really do enjoy listening to our users and potential users and take their feedback quite importantly. I mean, we're building this for American crypto enthusiasts, for the crypto curious, for the full-time job traders and professional institutional traders as well. So our ears are definitely in tune with our user base. And so one of the items that we've had recently was a user feedback survey that we listed for all of our folks that have downloaded the app to give us a little bit more feedback on really what they want. And it was clear from

from the feedback and the response that staking was one of the core components that folks in the United States were looking for to have within the same functionality of where they can access buy, sell and trade cryptocurrencies. So we're really excited to announce that staking is coming soon to finance US. What are the details now? I know that you guys are, you're just announcing this now. You're not sure about the exact dates yet, but what are the details for folks who are saying, okay, that's awesome, but now I want to know what assets, and let me get in there. Right. So if you look at the staking framework that you've got so far with the number of coins that allow for proof of stake, right now we list two coins so far that allow for proof of stake

coins. So that's Algo and Adam right now. And so going with when we roll out our staking platform, we'll be realizing that we can offer that in Algo and Adam. But as we know that we're, are always constantly exploring new coins that we can be listing, and the feature set of staking on top of good communities and the protocol list of our digital asset risk assessment framework can all be evaluated now. So that's something that's just exciting for us, kind of zooming out for folks that may not be totally aware of or did not put on the feedback form staking. The importance for this is being able to provide a different mechanism to which people can understand how they can be involved in digital assets. So the idea that with staking, you're actually contributing

to the operations and health of that network. In that sense, you get a reward is something that I think is novel to the concept of people thinking digital assets are just for speculation. And so the concept on top of that of being more or less like a savings account and then allowing you to put funds or or put certain assets towards that in order to make sure that the operations are run and that network is secure is really important for people to understand that that's a modulation on top of how crypto and blockchain can contribute to their own wealth. When I think about staking in the context of just the ongoing evolution of this space, I think that it's notable for a couple reasons, I mean, at least.

The first is exactly what you said, that this is functionally a different way to, interact with your assets from thinking about how they benefit you economically, right? It gives people a way to generate value from their assets without having to sell and trade and shift. And that's especially important for people who are long-term interested in a particular network or a particular protocol, right? And I think that that's a coming to fruition of the promise of some of these digital assets. I think the second piece is, again, what you were mentioning around the idea of taking the next step to actually participate in the functioning and the enablement of the protocol in that decentralized way. And that is something that, again,

has been integral to the mythos and the narrative of crypto assets, right? That these things are generated and maintained by these distributed decentralized networks of participants. And in fact, break apart the traditional organizational model by upending the difference between a network user and a network owner and staking, the more mainstream that it gets, the more common that it gets, the easier that it gets from a U.S. perspective becomes more and more real as a mechanism to do that. So it feels to me in some ways like both a maturation of the industry, but also a fulfillment of the promise of it that got a lot of people excited about the space in the first place. Absolutely. I mean, if there's anything we can do on top of iterating on kind of the pure purpose of decentralization is being able to identify areas that can connect with everyday users.

And so they can understand a little bit more about how blockchain is actually going to be functional down the road. And so that's kind of, I think about it, it's like stable coins, got people comfortable with that concept of a digital representation of, a currency. You know, although it's not the purest form, it's another iteration that lets people identify and get comfortable with how that operates. So they're like, okay, I'm fearful of the volatility. This is what digital assets are like when they're pegged to the dollar. And you're looking at staking, you're going, okay, I want to be contributing to the growth of a network. I want to get rewarded for it. I want to be, you know, involved in this larger growth of the ecosystem. but walk me through it, let me know how I can be a contributing factor.

And I think that's what staking really has that right incentive mechanism in place. It's going to be really interesting. And obviously, steps like having, you know, finance build that functionality in, obviously expand the set of participants just by decreasing the barriers to entry, right? Or at least that has to be some of the goal. Yeah, I mean, lowering the barriers to entry, I'm shocked.

I haven't said that six times already on this podcast. really the frictions that are causing us to understand this technology, to access it, to bring others into it, and grow a community around it, those are things that I just cannot express how important they are to finance our ecosystem and how our development in the United States is going to play a part. So it's really kind of purely on the understanding that this is conflicts. How can we make it easier? How can we make it more intuitive? How can we make it better suited specifically to your local market needs? And those are really kind of the items that we hit home and why we care so much about what our users think and what non-users think and what new users think as

well. The one place that I wanted to take this for just a minute is that bigger picture, right? So I'm interested to hear, you know, certainly it sounds like this idea of lowering barriers to entry and just making the whole space more accessible is top of mind for you personally and for the company as well. As you look out, you know, we're still in January 2020. What makes you optimistic for this year and what do you think are some of the biggest challenges that we face as an industry, right? Not just as finance. Yeah, no. That's a great question.

I mean, I think we've seen from the predictions of 2020 from the rest of the industry, quite a conservative growth plan, if I'm not mistaken. And so the idea of, you know, cementing the foundations, getting the infrastructure in place, getting the infrastructure accessible, really kind of building purer versions of what have maybe been built early on or were in kind of the stumbling phase and now are kind of becoming more established. I think that's very accurate, but also extremely conservative in where we can see this growth headed. You know, my goals in 2020 are definitely to be able to digest the opportunities that are ahead for us in digital assets, translate that to a broader set of audience members, and be able to

bring in a really useful element that will improve people's financial confidence. So that going into 2021, there are more people that understand what's in their wallet beyond a capital one phrase, understand how something can be bought and sold to generate either profits or understand the risks of the losses and understand where they can be making rewards in ways that can serve them for the long term based on their holdings. So it's a audacious goal to be able to translate financial understanding, especially crypto literacy or crypto financial understanding to folks, but it's imperative. that we take it seriously this year and continuing on. I continue to see kind of the attempts to bring finance

or just wealth management into a broader audience, and it sometimes hits, but there's still a huge amount of the United States, especially, that is not clued in privilege or aware enough to be taking control of their own lives. So I really do care deeply about that. I mean, I think it's anywhere from audiences, this just aren't familiar with, you know, the simple concepts of compounding interest as well as the

complex, more complex concepts, I'll have reversed those two of managing your own wealth and budgets. So I think that's something that's really important for us. And finance just gives that freedom for people to choose, to participate, to be active or to be passive in digital assets, but still remain involved. You know, one of the things that I thought was really notable, I did a bunch of end-of-year interviews beginning of decade prediction type things, right? And one of the things that was notable is this year as compared to last year is no one wanted to talk about price predictions, right? No one was publishing stories about like, here's what crypto influencers think the price is going to be at December 31st, 2020, or anything like that, right? It's almost like we're finally a couple years out of the ICU boom.

And the whole excitement of that and the, you know, insanity. of it in some ways has finally simmer to the point where the actors that are here that are building, the people that have stuck through it, there's a different sort of intentionality with which people are engaging in these markets. And I think that what you're saying about the opportunity to change the face of financial literacy is a really poignant one. And I don't know whether this is depressing or exciting or a little bit of both, but I guess one thing that makes me sort of optimistic is that there's so little financial literacy just in general right now, holding aside crypto assets, that the fact that some people are going to walk in through

the door of crypto, right, making their first investments in something like Bitcoin, right? And having this sense that this is the way that money or value should work for them is a really unique and exciting opportunity, although one that I think we should take seriously the responsibility that comes with it. Entirely. I mean, the ability to have such freedom also means the consequences of that freedom. So you really need to be aware of how managing your own funds, from any standpoint, I mean, call it managing your own quest for whatever you're going to be,

either investing in or the salaries that you might be taking on, at understanding just where your value is made and managed and grows. I think our concepts that we've shied away from and are beginning to see take place on the traditional financial side and can be supported even more so with an actual use case and the transparency of it and such in the cryptosphere. So that's what I get most excited about. Partially, I mean, I just take it back.

I kind of think about the concept of what are people learning right now that gets them excited and what careers are they pursuing to advance what got them excited. And I really want to know where people are looking back and going, I'm still so excited about the most traditional of finance. Like, is that still a compelling thing? And I think it clearly, by seeing the fact that most of these banks and institutions are still relevant is there, but they are changing actively within our presence. So we've seen, you know, the localization or the consumer retailization, you could call it, of

these larger banks and how they're bringing the sources and resources back down to the end consumer. And that's something where with crypto, it started there. So I think that's something that's just really novel in the concept of this didn't come from, you know, above, but this really was homegrown of the community itself. that's really where Binance is just being able to bring that community together with the most intuitive technology for accessing these digital assets and whatever we can do to improve the experience one has and the opportunities one gets with accessing these tools, something we want to be a part of. No, that's wonderful.

Kierkegaard, the philosopher, had this phrase, the dizziness of freedom that was meant to convey how the more truly free you get, the more anxiety-inducing it is, right? And I think in some ways, there's no industry that better demonstrates that than crypto, right? It's a totally new example and reality of freedom as it relates to money and wealth and all these sort of things, but it comes with these very new challenges. So very excited to hear that you guys are doing this. That's a really good take on it. But I at the same time would say, let me have that choice.

Yeah, yeah, exactly. Let me figure that out on my own. So that's what we really stand for, finance, US, being able to give that freedom of choice. So people can involve in staking or not. People can involve in, you know, 28 plus coins, different forms of ways to get dollars on ramps, different forms of ways to access. So, you know, app, mobile, web API. We're really, you know, still committed and standing to the freedom of choice to let people make those decisions.

So love it. Well, listen, thank you so much for all the time today and for your hard work on behalf of this industry. Where can people find out more they want to hear about staking or anything that's going on with you guys? Absolutely. You can find us most actively on Twitter. So that's at Finance America. If you have any questions, DM at Finance US help and we'll respond. And I'm at CryptoColi on Twitter. So I can also take your questions. My DMs are open. But we mostly provide all of our information through a website, finance. us. We have a telegram community channel as well as one that is just purely announcements. So if you just want the straight stuff, the announcements channel on telegrams, great one too. So there you have it. Staking is coming to Binance US. And it really, to me,

based on this interview, represents a much broader goal of making this space, making this industry more accessible, both for the people already in it, but also for new people who haven't come in yet. I'm interested to see what an actor in this space like Binance that has brand and leadership can actually do to make a dent in lowering those barriers to entry. All right, guys, that's it for today. Thanks as always for listening, and I will catch you tomorrow on The Breakdown.