Coinbase has submitted a request to the U.S. Securities and Exchange Commission (SEC) for approval to offer tokenized equities. This development opens new horizons for crypto investors.
Coinbase's Request for Tokenized Equities
Coinbase is actively exploring regulatory pathways to obtain approval for tokenized equities. The company's Chief Legal Officer, Paul Grewal, confirmed in an interview that Coinbase aims to allow its users to trade tokenized shares of publicly listed companies. This will require either a no-action letter or exemptive relief from the SEC.
Benefits of Tokenized Equities
Tokenized equities are digital tokens representing shares of companies, tradeable like cryptocurrencies. If approved, this would position Coinbase in direct competition with retail brokerages such as Robinhood and Charles Schwab. The model promises lower transaction costs and the ability to trade outside traditional market hours. However, challenges exist, such as secondary market liquidity and lack of common standards internationally.
SEC's Position on the Crypto Industry
Under the current U.S. administration, the SEC's stance has become less stringent. Earlier this year, the SEC dropped a case against Coinbase that alleged it was acting as an unregistered broker-dealer. Subsequently, the SEC has established a new task force to develop regulations for digital assets. Coinbase's request for a no-action letter might be one of the first tests of this emerging framework.
If granted approval, Coinbase could become one of the first equity marketplaces in the USA to connect traditional markets with blockchain environments. However, implementing such offerings will require meeting significant compliance, brokerage registration, and custodial agreements under U.S. securities laws.
