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Coinbase CEO expects corporate blockchains to consolidate

Armstrong said the flood of corporate networks could fragment liquidity and users before weaker platforms combine or retreat, echoing pressure seen in stablecoins.

Reported · Written up by our desk · Market Structure

Coinbase CEO Brian Armstrong said the wave of corporate blockchains is likely to end in consolidation rather than a lasting coexistence of many networks, arguing that network effects will eventually pressure weaker platforms to combine or exit. In the past year, major institutions and Wall Street firms have built new “rails” for stablecoins and institutional markets, raising concerns that regulated entities with established distribution could divert activity from permissionless networks.

Armstrong’s view is that new launches will first fragment liquidity and users, and that the threat to public networks is increasingly credible because companies are creating chains around businesses and customers they already control. VanEck Research highlighted that banks, exchanges, and payment firms could use proprietary networks to control validators and participation, protect sensitive information, guarantee costs, and retain fees that might otherwise flow to public blockchains.

The article cites examples including Stripe’s Tempo for payments, Circle’s Arc for stablecoin settlement, and Robinhood Chain for tokenized securities. It also points to early performance on Robinhood Chain, including roughly 200 million transactions in its first month, about $650 million in total value locked across applications, stablecoin supply of approximately $520 million, and 2.4 million monthly active users.

L2Beat tracking cited in the article shows 110 Ethereum scaling projects, including 22 rollups, seven validiums and optimiums, and 81 other systems. As of July 31, only 24 of those networks were processing more than two user operations per second, and activity fell below one operation per second for the 32nd-ranked network, illustrating that launching a chain is easier than attracting durable liquidity and usage. During Coinbase’s earnings call, Armstrong said corporate networks should face similar pressure as proliferation forces consolidation.

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