announcer: from the heart of where innovation, money, and power collide, in silicon valley and beyond, this "bloomberg technology" with emily chang. ♪ emily: i am emily chang in san francisco. in this is "bloomberg technology." coming out in the next hour, a loss the crypto lobbyists. the newly passed infrastructure built and tighter regulation of cryptocurrency. the ceo of kraken is not happy. he will tell us why.

plus, an interview with emilie choi. straight off second-quarter earnings. we will get her reaction to the infrastructure bill, volatility, and more. and, picture this. apple's latest iphone line will get three major new camera and video recording features for the . is it enough to kick off a super cycle? we will talk about it all. first, let us look at the markets. technology leading the decline. what did you pull out? kriti: we solve this reaction to a two-basis point pop and yields, unnoticeable move, showing a lot of people expect 10 year yields to rise tomorrow. you saw this with the tech underperformance. the s&p 500 up, closing at record high. eight let's look at the yield picture.

these are some of the technical levels we should be watching. that is where the 200-day moving average comes in handy. you are looking at yields hovering around that area and potentially breaking out tomorrow with the cpi print. i want to highlight what some of the other sectors are doing. you have semiconductors, the nasdaq golden dragon index, the nasdaq biotech index, all down in line with the trade. that could turn around tomorrow. that is the macro picture for the micro. let's go to ed ludlow. i am focusing on coinbase. a strong set of numbers for the second quarter. the stock is lower after hours. it had been higher, than flat, now lower. investors trying to make up their mind about what they are seeing. we saw a beat on the topline and bottom-line, but a warning that trading volumes will be lower in the current quarter. the actual trading volumes in the quarter just gone $462 billion, the volume dollar value of how much was traded to the through the platform, the estimate was $381 billion, so well about that. they point out the volume of

ethereum trading was greater than that of bitcoin. we know there were some upgrades to the ethereum network, transaction costs came down, and it was basically better traded. but this is a stock that moves in lockstep with bitcoin. let's bring up this here today chart and look at this. it is fascinating. as bitcoin pared back in recent months, if we pull up that chart, we will see coinbase following suit, moving and in symmetry. similarly with the bloomberg galaxy crypto index. most of what is happening on coinbase right now is retail-driven. 95% of the dollar value of those transactions. in recent day with the infrastructure bill, a lot of the focus is on the legitimacy. if you go on the forms, that is what the discussion is. whatever the net result, policymakers on capitol hill talking about this is giving cryptocurrency broadly some legitimacy, and you see that reflected in these coinbase numbers.

if you look at bitcoin over the last few days, over the last 24 hours, we are hovering around the level of $45,000. finally, just to say, there is some strength in bitcoin. just a few weeks ago, you and i were talking about bitcoin, $20,000. no more. to the moon. now people in the market are talking about bitcoin $100,000. emily: just to the moon? i think our next guest has some thoughts about that. thank you for that. we will be talking to the coinbase president later in the a crushing loss for the crypto hour. lobby, pushing to change crypto tax reporting rules and that in that infrastructure bill. it did not happen. opening the door to broader regulation of the crypto industry going forward. joining is now with reaction is the ceo of kraken. jesse powell. your recent tweets don't mince words. you say this has been killed out of spite, sending industry jobs, technology offshore. why, if i may say so, are you so infuriated by this?

jesse: it is a complete disaster. how this language got into the big in the first place is still a mystery. that we could not get this amendment through to make some obvious improvements that would save this industry in america is a real shame, and it is due to the holdout senator in alabama who was not willing to support this. so it is, i am also disappointed with the industry, in the we did not all come together on this. kraken emailed its user base, calling for support to contact senators, and not everyone did that. i think some people felt like they could rely on backroom conversations with senate staffers, and that obviously did not work out for us. in the end, what mattered was a senator nobody thought to talk to, so we need to come together on this, and going forward and put everything we have into the house, and now the problem is just four times bigger. right? we have to convince 400 people

instead of 100 people to do something, so we made our own lives difficult, but i think this is a wake-up for the crypto industry that we need to start our lobbying effort, more than we have been historically. emily: what does kraken plan to do to rally the support you need? this is partly education is happening at the same time that lobbying is. jesse: exactly. i think we all need to donate more to the blockchain association, first of all. second, the industry is talking about how to set up a super pac or how the industry can come together and finance the politicians that are on our side, and put more into educating goes who aren't. and i think you will see the crypto industry become a massive lobbying force, not just the companies, but the people who are cryptocurrency holders, and americans broadly see this as a national economic problem, that we need to keep this industry

onshore. emily: why do you think innovation will be stifled by this? what do you think will happen as a result? what are the real threats? jesse: as it is written with the bill says every time you tip up, someone, you have to get a 1099, so name, address, proof of identity, social security number in order to give them that tip. it is the same for the blockchain, anyone in the chain of transaction, software developer, node operator, bitcoin miner, a wallet operator coming anyone in that chain must collect tax information, and identity information, and report to the irs, which is nonsensical and completely misunderstands the technology and is not even possible and makes criminals out of everyone and kills the industry and kills the technology in the u.s., which means all of those businesses

that are generating tremendous amounts of tax revenue, the all of these software developers, everyone, the mining industry, which has recently received a huge influx from china, it will have to go back out of the country because these people have basically been made to be criminals by virtue of being forced to do something that is technically not possible to do. emily: meantime, today, the biggest hack yet, $600 million in assets stolen. this happening on the poly network. i mean, when these kinds of things happen, it screams the need for regulation for more oversight. what is your reaction to this? isn't it alarming? jesse: it is alarming, but it is a bit of the wild west and crypto. people all over the world are engaged with defi. we try to do audits on things as much as we can. some things have not been audited.

sometimes auditors miss something critical. i would honestly trust the auditors who are looking at these protocols more than others. big government institutions get hacked just as much, so i don't think it is something that needs more regulation. there is already plenty of consumer regulation and consumer protection out there. this space is regulated by the irs, the sec, you name it. they are trying to regulate the space, and they do, so i don't think it is more regulation. i think it is more education that we need. and no matter how much education, some people will gamble their money. and you know, we just saw a hedge fund guy who knew what he was doing lose $20 billion in one day. so i don't think it is about needing more protection. i think it's about more education. emily: as defi continues to expand, don't you think there

are going to need to be more guardrails? jesse: no, i don't think so. i think we have plenty of guardrails in place that extensively cover financial services and to a great extent cryptocurrency, and i think that calls for more regulation now are shortsighted and i think we need to see how the space develops. it is still the very early days. if we had tried to put too much regulation on the internet and in the early days, just to go to website to protect them, it would not be what it has become today with so much freedom and discussion around the world. and, you know, that is the hope of cryptocurrency, that we bring financial freedom and inclusion to the world. once we put it in a box and try to control everything, we take that potential away from it. i think now there is enough regulation to protect people, and i think we need to watch and

see what happens and help the space develop. emily: look, there has obviously been a lot of volatility. i will pick on bitcoin in particular in the past few weeks. you have been on the show talking about it going to the moon. infinity. mars. beyond. we have any new metaphors? are you still as optimistic about this otherworldly potential here? jesse: absolutely. the moon is the bear case for crypto. we are going to other dimensions with bitcoin. i think we could see $100,000 late this year, early next year. emily: jesse powell. i always appreciate the colorful metaphors. thank you so much for joining us. later, we have the coinbase president on the second quarter

earnings report. we have her thoughts on the new infrastructure bill and much, much more. you don't want to miss it. coming up, out with the old and in with the new, apple plans on releasing a new iphone with three major camera and video recording upgrades. mark gurman will have all the details. that is next. this is bloomberg. ♪ ♪

emily: apple is getting ready set to release the latest iphone. it will have new video and camera features. this after a controversy over

images in its icloud photo library. mark gurman is here with more. but let's start on the new camera and video recording features. what do we know? mark: the first is a cinema mode . it is similar to portrait mode. you can take a picture in the object or subject in the foreground will be sharp in the background will be blurred. this is known as the bouquet affect. this is a common technique used on high-end video. this will now be coming to the iphone for the first time. the new models are now several weeks away. the second feature is recording in what is known as pro-res, a higher-quality format that makes editing more capable for video editors. the third feature is the new ai-based photo filter system that can adjust colors, highlights, shadows in pictures,

upon individual elements of the photo op, an object, person, which is a bit more standard like the instagram filter system. emily: let's talk about the controversy surrounding apple's new software targeted at explicit images. a lot of people don't understand it and are reading the headlines and don't understand how it will work. what is your take on the ensuing reaction that we have seen here? mark: the reaction is fair. i think there is some misunderstanding about how the functionality works. apple is not actually viewing the images in your icloud photo library. they are scanning or analyzing the whole library and assigning what is known as hash keys using cryptography to each image, and those hash keys correspond to individual images. then there is a database operated by an institute against child exploitation and child abuse and child pornography and

they have a database of videos and photos they collected from law enforcement agencies over the years, and what apple is doing is assigning those hash keys to those images in the database as well so they are scanning your library and comparing the hash keys in your library to the hash keys and that database to see if they are a match. then when apple does come if there is a certain amount of matches in your photo library, and unfortunately they are not telling us how many that is, they will have human reviewers review those images, and if there is a confirmed match then it will notify the organization and law-enforcement. what apple should be doing is providing a better explanation as to what is in this database, who manages it, and how images get into that database. there is a lot of concern about that. i will not sit here and defend apple's efforts against child exploitation and explicit images. i don't think apple is doing anything wrong for wanting to prevent those images, but what i will say it is hypocritical to some people who say that apple

refused to give up, you know, to break into iphones belong to those behind terrorist attacks, such as with san bernardino, yet they are willing to do this against child pornography in photos. some people are saying they apple should be working with law enforcement or both, and some say neither. emily: there is a lot to debate. meantime, you have a story about how google is limiting ad targeting to teenagers, something instagram did a while ago. what can you tell us? mark: so we are seeing a lot of these companies apple, facebook, apple, facebook,, instagram, google, really limiting ad targeting. earlier this year, with the launch of apt tracking transparency, apple limited apps targeting and advertising tracking apps across the ios ecosystem. instagram is doing it for 18 and under now in relation to some

demographics and such and interests. now google is doing that as well, specifically across all services, but with a focus on youtube. there are a number of other new protocols in place to protect kids, stopping autoplay, so if you have kids watching youtube videos on continuous play in succession, keep kids up all night watching video. emily: uh, some kids in my household might be doing that, but in moderation. thank you for that update. meantime, softbank has reported a sharp drop in profits at its vision fun. masayoshi son's fund had enjoyed a strong run thanks to tech stocks, but quarterly results for the company show the value of investments and other holdings have declined. however, two chinese companies were the main reason that softbank stay profitable. facebook has removed two separate networks of accounts to crackdown on inauthentic behavior. one network originated in

myanmar and was used to spread divisive content about political issues, and the second from russia attempted to recruit real internet influencers to spread misinformation about covid vaccines. that network included 243 instagram accounts with more than 24,000 followers. coming up, travel in the time of covid. where can you go and which destinations are still sealed off as the delta variant takes over? we will tell you next. this is bloomberg. ♪

emily: this week, ebay and another company with quarter results wednesday. thursday, disney, airbnb, and sofi. airbnb will be interesting to watch as other companies gave optimistic outlook despite the delta variant cases.

take a listen. >> people are desperate to travel. there is a demand and hunger. >> there is a big appetite to travel, so everywhere people can travel, we see bookings. >> cruise demand is strong. our guests are thrilled to be back. >> we are seeing people more comfortable to be in hotels and, , resorts, all the usual lodging use cases. >> we see increase for demand in the future for leisure and business demand. >> we have among the best protections in the leisure business. >> while the variant is out there, overall, bookings and experiences are accelerating. >> i think we will continue to see that. i don't see delta having a particularly large impact. emily: for more on the reopening of trouble in the u.s. and abroad, i am joined by drew armstrong. what is opening, what is closing down? drew: it is a great question.

developed this tracker to answer which is the reason why we three questions. first of all, where can you go? second of all, where is it safe to go? third, if you go, is it worth it? are bars and restaurants open? can you do stuff? so we looked at 1500 different travel combinations that involved about 40 different financial and leisure capitals, and we were able to compile ratings for every single one of those using a combination of travel data from a third party, and our own reporters on the ground, and vaccine data we have collected to show you what it is like to be there. the take away so far is that a lot of the world is still not very open. only 18% of the places we looked at really are open and accessible and operating. a lot of the world remains in the closed category. emily: so what do you see

happening next year? do you expect many more destinations will shut down? the numbers seem to be getting worse around the world. drew: it is a great question. one of the reasons we did this in part, i mean, if you have been watching the headlines over the last week, you have seen new restrictions that could be put in place in some places and lightened in other places. i mean, this is stuff that changes very fast, a lot of times depending on the public health situation on the ground. and so it makes it very hard to know where you can go and what the rules are going to be if you do try to make those trips. i think, in general, even in the u.s. and elsewhere, it seems to be vaccinated travelers with the general trend towards reopening, even with the delta. not true everywhere. it is not true all the time, but clearly, people are getting vaccinated and want to travel because they feel personally protected at that point. i think we heard it from some of the clips you played earlier. emily: do expect more countries

will implement more restrictions? drew: i have a feeling we will see some of that. we have been seeing the u.s. add some countries to its warning list for travel. i have a feeling we will see those things. we have seen lockdowns in australia. we have seen the resumption of some restrictions in china locally, so clearly this is not a one-way street, and we will see us these waves of delta cases spike, especially with an vaccinated populations, that will affect things. emily: right. drew: so, for us, this is about trying to pinpoint the places where you can go, and also identify those places where you can't go. emily: especially as schools are starting to reopen around the world. we will continue to follow it. bloomberg's drew armstrong, thank you to you and your team for continuing to bring us the most updated information. coming up, tesla's footprint in china fading, falling negative

, following negative publicity and the recall of almost every car sold in the country. we will have the latest on that story next. this is bloomberg. ♪

emily: welcome back to "bloomberg technology." i am emily in san francisco. tesla's china troubles continue, with shipments of locally made cars plunging into pie. this, following a run of negative publicity and the recall of almost every car the company has sold in china. for more, i want to bring in ed ludlow. i think when you say it that way, it is hard to believe every single car in china has been recalled. what exactly is happening here? at the: the numbers have a

really important -- ed: the numbers have a really important breakdown. for the first time, we saw a big drop in the number of cars built in the shanghai factory that are delivered to chinese customers. what has happened over the 12 months is shanghai has become the center of production for tesla. it is no longer from where we are sitting, but shanghai. look at your screen. the orange bar is what you're looking at. we care about that because china is the world's biggest automobile market. it is still building a lot of cars in china, but now for the first time, more are going overseas, mostly to europe. that is not a bad thing. those are higher-margin cars. tesla has done a lot to localize the supply chain. it makes a lot of money on those cars, but it is worrying about what it signals for the company 's performance in that market. emily: how is the performance compared to the rest of the world? the world is their oyster, right? ed: it is still the biggest market, but china was the growth

market, because it is the world's biggest automobile market. the difference with china, and we have a chart that shows tesla's revenues by different regions, the blue bars are china. for long time in recent quarters, that is where the growth is coming from. it slowed down last quarter when this started happening, the kind of clash with consumers, regulators coming in. emily: and is that going to continue to slow? ed: well, the latest data set is not a good sign. we know that for a long time that tesla was the darling of the chinese government. they really helped the company get set up, but now it seems they will have to do a lot better to improve the situation for consumers and allay some of the fears. emily: meantime, the stock has been in a holding pattern. is this in part due to the china concerns? ed: it's hard to say. the run-up in the tesla shareprice in 2020 was so massive that it is now underperforming. it is just in positive territory , you can see the orange line, just in positive territory

year-to-date. part of that is we saw gains last year and now we are normalizing a little bit. i think that a lot of folks are waiting on ai day next week to see what the next phase looks like, and indeed, if there is something substantial they are and whether we see real-time driving. emily: hang on. i want to bring in our guest and talk about the amount of time it is taking for companies to get orders, now stretching to 20 weeks. ian king, our long-time chip reported joining now. 20 weeks? why is that? ian: it is a continuation. many people were thinking we would see the numbers stabilize, we would see some sense that things are normalizing, but that is not the case. it just keeps going and going and going. emily: so, the chip shortage is not a secret anymore. we have known this is happening. why aren't companies just producing more chips?

ian: very good question. there is no greater question than this one. it requires constant updating. assuming every chipmaker in the world on january 1 decided we have to make more chips and decided to build new plants, that production will not be coming online until the middle of next year. they have this enormous inertia that goes into building one of these plants, so yes, they can update their reduction lines, even getting a new machine, it's six months, then you have to install it, get it to work. so really the industry just can't turn on a dime. it cannot catch up with the amount of demand. ed: when we talk about semiconductors, we talk about them together. we tend to lump them together. we have had a lot of car companies report earnings, saying the situation is improving and they expected to get better in the second half of the year. is that really the case? there are lots of types of semiconductors.

is it universal that leadtimes are stretching, or are there different parts of the market doing differently? ian: that is a good question. particularly the automakers. even if you're getting some things improving, you can be sure one small component that is part of the whole package, the analogy is the $.30 part stops you from shipping the $30,000 car. today, microcontrollers, they continue to be problematic. that is the kind of thing that when you have an expensive car like emily has, you press the button in the trunk opens automatically, that is the microcontroller at work. on the other side, some of the power management chips controlling the battery packs inside teslas are coming back . it looks like we are getting more supply of those. emily: ian, you are invited to

see my minivan, which carries my family, including my four children. is there any good news we can expect? at what point does the lead time come down? ian: there are two ways to look at this. the scary side would be things are getting worse, supply is getting pushed out more and more, and we are getting worse in meeting demand. the other side to look at is something investors look at, hold on a minute, maybe this is inventory building, maybe things this is and overshoot and things are about to reach a peak and we will see things normalizing. maybe this is a harbinger in terms of the short-term, the short-term, you know, the return to normal levels and things like that. there are a number of ways you can interpret these numbers, but we are in that territory. emily: thank you. thank you both. we will keep following.

me and my minivan. coming up, how ai is transforming the face of fintech. we are talking with lending company upstart on their earnings report and the future of finance. that is next. this is bloomberg. ♪

emily: lending company upstart just went public in december, and they are now out with earnings and forecasts. shares reacting positively. at one point, up 15%. now after hours almost 18%. for more on the report and the future of fintech, i'm joined by the ceo. he just joined us after the company earnings call.

what do you think about the reaction? >> thanks. it is the combination of superfast growth combined with profits. i mean, fintech companies are known for growth, and when you that together with profits, people get excited. emily: the key feature is artificial intelligence and how you are integrating that into the process. talk to us about how companies are leveraging this technology. david: sure. we operate not as a bank or lender, but as a partner to banks to let them use ai technology to originate credit. technology. that means more accurate models that will approve more people at lower loss rates, so when you put it together, it dramatically increases or improves access to credit for consumers and helps banks have more inclusive and profitable lending programs. that is kind of the heart of ai it comes to lending. -- ai when it comes to lending.

emily: our traditional lenders keeping up with the technology and how do you know which ones are and are not? david: it is a good question. it is hard to compare lenders and the results of lending. sometimes it takes a while to play out. so it is hard for the world to completely grasp what is real and what is not, because there are lots of buzzwords, but ultimately a strong business ends up in growth and profit, and i think that's what we are demonstrating here. emily: one of the more positive aspects of this is how ai can be used to make lending more inclusive. talk to us about how that works. david: yeah. it sounds almost counterintuitive. you think of a smarter lending program that saying no to more people, but it is the opposite. when the model is better at separating those who can pay back a loan and who cannot, it ends up approving more people, because traditional models are bad at identifying credit worthy

individuals, so a smarter model on balance will approve more people at lower rates. that is why on balance, ai helps everybody, every demographic, so it is really a powerful change. emily: meantime, you have an interesting window into the economic health of people as we come out of a pandemic. so many people have lost their jobs. it has been a tough time for many folks. what are you seeing out that in that window? david: the economy is not what it was. it is different. unemployment has come down a lot. it is not pre-covid levels. the amount of government sickness and the way that certainly kept credit balances or banks afloat, people paying back the credit, so it is an unusual environment. we still view it operating with headwinds in terms of demand for credit. credit card balances are as low

as they have been in a while, savings rates are up. and that is all good for the consumer. it doesn't mean credit demand can be down, but we are still growing, which is great. it is an unusual time. i think all of us anticipate in the next two or three quarters, a return to a normal economy in terms of employment, spend rates, and only a matter of when. emily: all right. the ceo of upstart. shares officially up 18%. 17.92% after hours. thank you for joining us. david: thanks. emily: coming up, the coinbase president emilie choi on the earnings report and her take on the new infrastructure bill and what it means for crypto and volatility, next. this is bloomberg. ♪

emily: coinbase out with earnings that topped estimates, but provided guidance indicating q3 could see lower monthly users and trading volumes. coinbase went on to say it's total trading volume group 38% sequentially. edging slightly lower in late trade. i spoke exclusively with the coinbase president emilie choi and the growth of institutional versus retail investors. emilie: i think that what we looked at on the institutional side is the quality of the different investors. we talked about the fact that more than 10% of the largest hedge funds by assets under custody are now using coinbase in some way. on the retail side, a huge part of it. i think the big thing that happened over the past 12 months was that we saw that more than half of trading volume started to come from institutions. and so that was the newer

business. obviously that is a higher volume segment. so it is cool to see both businesses taking off and benefiting from one another with liquidity. emily: you are not providing financial guidance, but saying monthly transactional users will be lower sequentially, same for trading volume. why is that? emilie: well, the reality is we are looking at this as a long-term business, so this is a period of years, not quarters. our predictability is just not going to be good. we have to be transparent about that. when we look at this stuff, we say there was a ton of volatility this quarter. volatility benefits our business in a massive way. we have a lot of growth in these segments, and so we will not continue to have his business where you have incremental up and to the right. it will be bumpy. that is the way we built the business. we are used to the volatility. we embrace the volatility. the last time i talk about how volatility is a feature not a

bug for us. the business is growing beautifully, but we will not look at it in a myopic, quarter-by-quarter basis. emily: how do you benefit from the volatility? explain that? emilie: when prices get high or low, there is a lot of volatility in the market, and people would trade regardless of whether there are high prices are low prices, so because the fundamentals of our business are based on a transaction model, we will make money on that either way. emily: ok. now the senate just passed this $1 trillion infrastructure plan. they could not get a deal done on the crypto language, which looks like the crypto industry could be broadly regulated. does this concern you? does it concern you for the industry at large, and also for coinbase? emilie: zooming out, this was a actually a big moment for crypto, and ultimately positive. if you think about the 1.5

$1.5 trillion infrastructure bill was held up because of a small crypto provision that lawmakers did not necessarily understand the implications of what that provision might be. what it speaks to is the fact that crypto is going to be a major source of tax revenue to fund infrastructure. that is actually a very positive thing, and something we think is positive for the industry. it is no longer a fringe thing. crypto has really entered the mainstream here. this was a setback. there is no doubt about it, this past week, but we are playing the long game here, so we think education and what the crypto industry does with lawmakers to help them understand the potential for crypto, the more we can shape the regulation to make sure we are protecting customers, and at the same time non-inadvertently hindering crypto innovation in the u.s. and having it move offshore. emily: coinbase has been beefing up the policy side of the team. i know you are working to talk

with regulators. what kind of regulations do you want to see from regulators? emilie: ultimately we want a fair and even playing field with the rest of the financial services industry. so one of the really interesting kind of scratch-your-head moments with this amendment was thinking about, if you send money to your sister, that transaction is not going to require any information about your sister, unless it is tagged as something that is dangerous, nefarious, or some threshold of dollar amount, right? so if you were sending that through wells fargo, for example. so why would crypto be regulated in a different way than the traditional financial services industry? we simply want an even playing field with financial services. emily: sec's gary gensler call the crypto industry recently by the wild west and once investors better protected.

what are you looking at? emilie: we did not know it will be regulated as a security. we need to figure out the rules. we pioneered this idea of a digital asset framework, digital asset listing framework, where we have a bunch of criteria to determine whether or not we think it is a utility or a security. and at this moment, all the coinbase list go in as a utility, not a security. if parts of the crypto ecosystem become part of that, we think it will be an opportunity to play in that. what we're seeing right now is frankly there is some confusion amongst regulators about which parts of the crypto ecosystem they want to monitor, what they want to regulate, and so what we want is more clarity. we want to work with him on figuring out the rules of the road and how we can regulate and that protects consumers, customers, but does not inadvertently hinder innovation. it will move offshore.

crypto is a decentralized movement. if you try to put that genie back in the bottle, it will morph into something else in another part of the world. emily: interesting. meantime, a huge defi hack was just revealed on poly network, a whopping $600 million worth of assets stolen. how big of a risk is defi for you? this is a big and growing part of your business. given that hacks, frauds, scams can happen? emilie: coinbase is built on a very big foundation of security with the kind of things our founder and ceo brian armstrong built the company on. and so the way we have built infrastructure, the way we add assets, launch features, launch products is predicated on this foundation of security, and sometimes slows us down, but in a good way. there are going to be hacks. there are hacks in the current financial system. our responsibility a coinbase is to make sure we are doing as much as we can to protect consumers on our platform.

when other things happen off of our platform, we cannot necessarily control them, but we hopefully we can all learn how to better protect against hackers. emily: looking at centralized and decentralized finance, which both parts of your business, which do you see being bigger in the future? emilie: it is interesting because the whole foundation was built on centralized finance, then our founder and ceo brian armstrong recently wrote opposed a post about how much of the future will be from decentralized financial applications. we don't know how long that will take. right? we did not know when the app store was launched how long it would take for a robust app ecosystem to happen. or when the internet was first launched, how long it would take for internet adoption happen. i think we can't predict it, but the attributes of decentralized financial application,, things like enhanced privacy and protection, and, you know, the

benefits of the blockchain, permissionless, 24/7, that those are things that appeals to users, so over time, that will be a force of nature. but timing? who knows. emily: right. you just announced your vice president of capital markets is leaving after four months on the job. he is a former director at the sec. what happened and what does it mean for the priorities for that part of the business? emilie: yeah, we wish him the best. this was simply a de-prioritization exercise. we always have to make hard calls about different products we are working on based on what demand we are seeing, and were seeing so much demand in the core business that we had to de-prioritize that. we think there will be a robust market for digital securities over time, and back to your other question about sec oversight, we want to make sure that there is a good regulatory framework for digital securities, that we actually see

market demand for digital securities, and when that moment happens, we are very well poised to capture that opportunity, i think. emily: another exchange, falcon x, just raised $3.7 billion. robinhood just went public. the ceo told me that crypto is a huge part of their future and they are working on expanding crypto services. how concerned are you about the competition and do you see it as a threat? emilie: we think the market opportunity for crypto is massive, and we welcome players into the space, because we all grow this together. when we see players such as paypal, robinhood and others get into the space, it validates the is a key validator of all the hard work we have been doing since 2012. the thing that folks should understand that as users become more sophisticated, they want crypto-first features and assets, and that is what we are well poised to do. right? so we added more assets this

quarter than all of 2020. you might come into buy one asset, then we will expose you to other assets and you will learn about them. you might want to use other features beyond buying and selling, send and receive, and so we are the crypto-first company. that is the heritage of the company. that is what we were built on. and it permeates everything we do. you can imagine back in the day when some of the old-school retailers were like digital is a feature. that did not do great against something like amazon, which was digital first. in the same way, we believe crypto first will be the key to our future. emily: an exclusive interview there with coinbase president emilie choi. and that does it for this edition of "bloomberg technology." join us tomorrow. we will hear from the ceo of one flying taxi start up. he will join us after that company starts trading on the new york stock exchange. also, greylock partners and

others hoping to take them public. you don't want to miss that. i'm emily change in san francisco. this is bloomberg. ♪

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