The financial system is moving on-chain: How Coinbase is bridging traditional banking and crypto utility with Max Branzburg

Blockchain technology continues to bridge the gap between traditional finance and the digital asset ecosystem. Today, we’re witnessing a fascinating convergence where decentralized finance protocols are being integrated into user-friendly platforms, making sophisticated financial tools accessible to everyday users.

One of the most significant developments in this space is the ability to leverage crypto assets without selling them—unlocking liquidity while maintaining exposure to potential appreciation. Coinbase has recently launched a groundbreaking product that allows customers to borrow USDC against their Bitcoin holdings in under a minute, all powered by onchain lending protocols.

I’m delighted to welcome Max Branzburg, Vice President of Product at Coinbase, to discuss this innovation. As a key architect of Coinbase’s product strategy, Max has been instrumental in developing solutions that make crypto utility more tangible for millions of users. Today, we’ll explore how Bitcoin-backed loans represent a pivotal step in Coinbase’s vision for onchain financial services, the technical infrastructure making this possible, and what this means for the future of personal finance.

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On-Chain Financial Services Are Superior to Traditional Systems

The fundamental premise behind Coinbase’s strategy is that blockchain-based financial services offer inherent advantages over conventional systems. By leveraging on-chain protocols, financial products can be delivered instantly, with minimal or no fees, and without intermediaries—creating a compelling value proposition that traditional finance cannot match.

“We’re really trying to disrupt what the traditional financial system offers today, and that’s one of the reasons that we’re building on chain, and we think that the whole financial system is really moving on chain. One of the powerful features of on-chain financial services is that they are instant and they’re very cheap or free, in most cases, they’re globally accessible. Anyone can access them. They’re permissionless.”

The Platform Approach vs. Vertically Integrated Products

Rather than building proprietary, centralized financial products, Coinbase is creating a platform that connects users to a vast ecosystem of third-party developers. This approach enables rapid innovation cycles and a diversity of products that would be impossible under traditional banking models where each service is built in-house.

“It’s going to be very difficult to compete when you have to build vertically integrated financial products that go through a years-long or multi-year-long development cycle to deliver to your customers, when other platforms can offer dozens or hundreds of those financial products, and see the innovation and iteration on those products every day.”

The Blurring of Centralized and Decentralized Finance

The dichotomy between centralized and decentralized finance is fading as hybrid models emerge. Coinbase exemplifies this trend by providing the trust, security, and regulatory compliance of a centralized entity while enabling access to decentralized protocols—creating a bridge between traditional finance and the crypto ecosystem.

“I think those terms are gonna blur frankly over time. […] This product from Coinbase is a good example of that. I mean, people think of Coinbase as a centralized exchange. This product is really built on decentralized protocols and enabling people to access those decentralized protocols, so I think it is already blurring.”

Utility First, Investment Second: The Evolving Adoption Curve

The traditional crypto adoption path is being inverted. Rather than users entering the space primarily for investment purposes and later discovering utility, many now come for practical applications like instant global payments and only afterward consider investment opportunities.

“What’s interesting is so much of the utility in crypto is actually coming before the investment use case now. Used to be ‘come for the investment, stay for the utility.’ And now in many cases, it’s ‘come for the utility, stay for the investment.’ […] You can send [USDC] anywhere around the world instantly for free, anytime, if it’s the weekend, if it’s non-banking hours.”

Stablecoins as the Gateway for Traditional Financial Institutions

For traditional banks and financial institutions, stablecoins represent the most accessible and immediately valuable entry point into crypto. The massive transaction volume—surpassing major credit card networks—demonstrates the market demand and efficiency gains that financial institutions cannot ignore.

“One of the places that I think banks are seeing the value most clearly is around stablecoins and payments. […] Last year, for example, there were $30 trillion of transactions in stablecoins. That was more than Visa, MasterCard combined did last year. And so the numbers are staggering when you think about it, and so banks are taking notice of this.”

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