Coinbase CEO Brian Armstrong has made a bold prediction that the future of public listings lies in fully on-chain Initial Public Offerings (IPOs), arguing that current regulatory burdens and high costs have created a system that stifles innovation and limits investor access.
Armstrong contends that traditional IPOs have become prohibitively expensive and slow, with the average cost reaching approximately $300 million per listing. These costs encompass bank fees, legal work, audits, and compliance requirements, while the preparation process can take years. This has led to a significant shift where companies now remain private for nearly 20 years on average, compared to just five years in the 1980s.
The CEO identifies heavier regulation, such as the Sarbanes-Oxley Act, as a key driver for companies staying private longer. While designed to protect investors, these rules increase complexity and expense, pushing startups to rely more on private funding. This dynamic limits early investment opportunities for average investors and institutions, concentrating gains among private equity and venture capital firms.
Armstrong's proposed solution involves tokenizing company shares on a blockchain, enabling direct trading and settlement. This on-chain model could drastically reduce the need for intermediaries, shorten settlement times from days to minutes, and open participation to a global pool of investors. Smart contracts could automate complex compliance tasks, reducing paperwork while ensuring transparent and secure record-keeping.
During an interview, Armstrong elaborated on his vision for a complete on-chain startup lifecycle, from incorporation to going public. He suggested founders could potentially use platforms like Coinbase to "press the raise money button," sending pitch materials to investors and receiving capital quickly via USDC smart contracts, bypassing the traditional, months-long fundraising process.
Coinbase has been actively collaborating with the SEC to develop frameworks that would allow retail investors to participate in on-chain financing with appropriate safeguards. Armstrong revealed he attempted a partial on-chain public offering for Coinbase in 2021 but found regulators unprepared at the time. He also acknowledged that while accredited investor rules offer protection, they simultaneously block non-wealthy individuals from high-growth investment opportunities.
Despite the promise, significant challenges remain. Current securities laws are not designed for blockchain-based listings, requiring regulatory adaptation. Issues of privacy and investor protection in a decentralized environment also need to be addressed. However, Armstrong's comments signal growing belief in this potential shift, coinciding with a surge in traditional IPO activity in markets like India, where 21 startups have already filed for public listings in 2026.
