With the rapid growth in the creation of new tokens, Coinbase Global Inc.’s CEO, Brian Armstrong, has acknowledged that the current process for listing and evaluating tokens is no longer sustainable. According to Armstrong, “There are ~1m tokens a week being created now, and growing,” a challenge that has turned into a “high quality problem” for the company. He emphasized that the volume of new tokens makes evaluating each one individually increasingly impractical.
This surge in token creation has raised questions about how to properly evaluate and list these digital assets. Armstrong has suggested that both Coinbase and regulators may need to rethink their approach to token approval. One potential shift he proposed is moving from an “allow list” to a “block list” system, where tokens would be assessed and only those with questionable or potentially harmful characteristics would be blocked, rather than requiring approval for each one individually.
Armstrong also called for the use of more advanced techniques like reviewing and scanning on-chain data to assist customers in navigating the increasing number of tokens. This approach could help sort through the flood of new tokens while ensuring that regulatory scrutiny and consumer protection remain intact.
The suggestion comes as the cryptocurrency industry continues to grow rapidly, with new tokens being minted at a staggering rate. This growth presents both opportunities and challenges for exchanges like Coinbase, which must balance regulatory compliance, customer safety, and innovation in a highly volatile and rapidly changing market.
With regulators around the world beginning to scrutinize the crypto industry more closely, Armstrong’s comments highlight the need for a shift in both industry practices and regulatory frameworks to keep pace with the increasing complexity and volume of digital assets being created.
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