Coinbase, one of the leading crypto exchanges, has requested approval from the Securities and Exchange Commission (SEC) to offer tokenized stocks to its users. This move opens new horizons for trading and positions Coinbase in direct competition with other trading platforms.
How Tokenized Stocks Could Transform Market Trading
Tokenized equities are digital versions of company shares that exist on a blockchain. Instead of owning the actual stock, investors hold a digital token representing it. These tokens can be traded on blockchain platforms like Bitcoin (BTC).
Supporters say tokenized stocks could lower costs by cutting out middlemen, making trades faster, and allowing trading outside regular market hours. In 2024, industry leaders predicted that the Real-world asset (RWA) tokenization could reach over $600 billion in assets under management (AUM) by 2030.
However, a recent World Economic Forum report said tokenized stocks often lack enough buyers and sellers, making trading harder. There are also no clear global rules yet, which could slow their adoption.
Coinbase Seeks SEC Approval to Trade Tokenized Stocks
Trading tokenized stocks is currently not allowed in the U.S. For Coinbase to move ahead, it needs special approval from the SEC, known as a 'no-action letter.' This means the agency will not take legal action if the company offers the service.
Coinbase is not registered as a broker-dealer, which is usually required to trade securities. In 2023, the SEC sued the exchange for acting like one without permission, but the case was later dropped during President Trump’s administration.
Coinbase’s top lawyer, Paul Grewal, recently stated that this is a significant priority. He did not confirm whether the trading platform has officially asked the SEC yet, but said a no-action letter would give companies more confidence to move forward.
Trump Administration Takes Softer Stance on Crypto
Coinbase’s move comes as the U.S. government shifts to a more crypto-friendly approach. President Trump has supported the industry by meeting with crypto leaders at the White House and nominating pro-crypto regulators.
This regulatory change has boosted confidence in the market. As a result, Bitcoin and other cryptocurrencies have hit new highs this year as more investors get involved. Under Trump, the SEC also dropped lawsuits against big crypto firms like Coinbase, Binance, and Kraken.
A new task force is now working on more explicit rules for digital assets, marking a fresh start for the industry.
In the near future, Coinbase is expected to continue pushing its initiative to tokenize stocks, which could transform the landscape of financial services and increase market accessibility for new participants.
