Coinbase, a leading name in the crypto industry, is taking a bold step to bridge traditional finance and blockchain technology. The company has formally approached the U.S. Securities and Exchange Commission (SEC) seeking approval to offer tokenized stocks—digital representations of public company shares—on its platform. If granted, this move would position Coinbase as a pioneer in bringing blockchain-based equity trading to the U.S. market, setting the stage for direct competition with established brokerages such as Robinhood and Charles Schwab.
What Are Tokenized Stocks?
Tokenized stocks are digital tokens that represent ownership in real-world equities. Instead of holding a physical share certificate or a traditional brokerage account, investors would own tokens on the blockchain, each corresponding to a share of a public company. This model allows for:
• Lower trading costs
• Near-instant settlement
• 24/7 market access, unlike traditional stock exchanges with limited trading hours
Why Is Coinbase Making This Move?
Paul Grewal, Coinbase’s Chief Legal Officer, highlighted in a recent interview that tokenized equities are a top strategic priority for the company. The goal is to make stock investing as seamless and accessible as trading cryptocurrencies, leveraging blockchain’s efficiency and transparency.
Regulatory Roadblocks and Opportunities
Currently, Coinbase is not a registered broker-dealer—a key requirement for offering securities in the U.S. To proceed, the company must either obtain a “no-action letter” from the SEC (which would signal regulatory approval) or secure special exemptions to operate under modified rules. Grewal emphasized that such regulatory clarity would reduce legal risks and set a precedent for future blockchain-based financial products.
Coinbase’s push comes at a time of shifting regulatory attitudes. After a lengthy legal dispute, the SEC recently dropped its lawsuit against Coinbase for allegedly operating as an unregistered broker-dealer. This, along with similar outcomes for platforms like Gemini and Robinhood, signals a more open stance from the SEC toward digital asset innovation under new leadership.
Industry Context and Global Trends
While Coinbase is seeking to launch tokenized equities in the U.S., other platforms such as Kraken have already introduced similar offerings in overseas markets. The U.S. regulatory environment, however, remains a critical battleground for mainstream adoption of blockchain-based stocks 5.
Potential and Challenges
Tokenized equities promise to democratize access to the stock market, reduce friction, and enable global participation. However, challenges remain, including:
• Regulatory uncertainty
• Potential liquidity issues
• The need for standardized global frameworks
As the SEC reviews Coinbase’s proposal, the outcome could set a transformative precedent for both Wall Street and the crypto sector.
