He urged regulators to set up a blocking system for unverified tokens
He said customer reviews must be examined to scan on-chain data
Armstrong claimed around one million tokens were entering the market every week
Photo Credit: Gadgets 360/ Radhika Parashar
Coinbase CEO Brian Armstrong has raised concerns about the rising number of crypto tokens flooding the market. In a post on X Sunday, Armstrong claimed one million crypto tokens were being created on a weekly basis. With the massive influx of new tokens, he said, evaluating each token was no longer feasible. As per CoinMarketCap, over 10.19 million crypto tokens are currently in circulation.
Armstrong, who co-founded Coinbase in 2012, said the flooding of crypto tokens into the market had become a problem. He also noted that regulators needed to put in place a blocking system for tokens that have not applied for regulatory approvals.
“Regulators need to understand that applying for approval for each one is totally infeasible at this point as well (they can't do 1m a week). It needs to move from an allow list to a block list, and utilise customer reviews/automated scans of on-chain data etc to help customers sift through,” the 42-year-old crypto mogul said.
We need to rethink our listing process at @coinbase given there are ~1m tokens a week being created now, and growing. High quality problem to have, but evaluating each one by one is no longer feasible. And regulators need to understand that applying for approval for each one is…
Coinbase said last week it represented over $3 trillion (roughly Rs. 2,59,10,248 crore) in market cap. According to its website, the exchange does its due diligence before listing tokens on its platform. It takes votes on which assets get to be listed from its internal Digital Asset Support Group (DASG) while also assessing tokens based on their legal, compliance, and security standards.
The Coinbase chief was recently at Davos, Switzerland, for the World Economic Forum. Summarizing his key takeaways from the event, he said corporate leaders, banks, asset managers, and payment service firms had made it clear they were increasing investments in crypto. Armstong has thus highlighted the need for smarter rules that can make the crypto sector safer on a priority basis.
He has also noted that the return of Donald Trump as the President of the US has forced ‘everyone to up their game'.
“There are going to be more players and competition than ever in crypto and we welcome it all. We need crypto to update the entire global financial system to bring these benefits to everyone,” Armstrong said.
Given the projected growth margin for the crypto sector, regulators in several parts of the world are putting safety measures for the stakeholders in place. The crypto sector is still impacted by micro or macro developments around international politics and financial developments, among other factors.
In India, for instance, the government is yet to release a comprehensive set of regulations to oversee crypto. Meanwhile, industry bodies are taking up the task of deploying certain parameters to ensure that the sector is protected against scams like rug pulls and exploitation.
In April last year, the Bharat Web3 Association laid down some rules for crypto exchanges to follow while considering the listing of new tokens on their platforms. Based on the ‘Plan, Execute, Check' (PEC) framework, these guidelines direct all crypto exchanges to become primary screeners for new tokens looking to get listed and establish minimum standards to review tokens that are in the pipeline to be listed for public engagement.
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