Coinbase is making a move to reshape how Americans invest in stocks.
Specifically, the crypto giant is seeking approval from the U.S. SEC to offer tokenized equities, digitally represented shares of public companies, via blockchain. If approved, Coinbase would become one of the first platforms in the U.S. to enable blockchain-based stock trading. It would put it in direct competition with traditional brokerages like Robinhood and Charles Schwab.
In an interview with Reuters, Paul Grewal, Chief Legal Officer at Coinbase, emphasized that tokenized equities are a top strategic priority for the company.
Notably, tokenized equities convert traditional shares into digital tokens that can be traded on blockchain platforms, exactly how cryptocurrencies trade. Instead of owning the actual stock, investors hold tokens representing ownership of the underlying equity.
This innovation reduces trading costs, enables faster settlement, and allows 24/7 market access. However, critics argue that regulatory gaps, low liquidity, and a lack of global standards pose challenges to widespread adoption.
Regulatory Hurdles for Coinbase
Coinbase is currently not a registered broker-dealer, which is a requirement for platforms offering securities in the U.S. To move forward, the company must either secure a “no-action letter” from the SEC or exemptive relief to operate under adjusted guidelines.
Grewal noted that obtaining a no-action letter from the SEC would provide regulatory clarity. Specifically, it would confirm that the agency views such offerings as compliant, reducing enforcement risk.
Previously, Coinbase came under SEC enforcement action in 2023. After more than a year of legal battles with the SEC over claims that it operated as an unregistered broker-dealer, the agency dropped the lawsuit earlier this year under a new leadership.
Other crypto platforms like Gemini, Tron, and Robinhood, which the agency previously sued, have also benefited from this easing. The move confirms the SEC’s updated position on digital assets and the companies pursuing them.
Improving Landscape Opens Door for Coinbase’s Latest Offering
The ease comes on the back of the Trump administration’s increased support for the crypto industry and the restructuring of SEC leadership.
Under the new administration, the government has hosted industry leaders at the White House and formed a crypto-focused task force to create new regulatory frameworks.
Notably, Grewal didn’t confirm whether Coinbase had submitted an official application. Yet, the effort highlights Coinbase’s ambition to expand beyond crypto and into the broader financial system.
Firms like Kraken are already offering tokenized U.S. equities in overseas markets. Meanwhile, Coinbase shows eagerness to lead the charge on home soil, pending a green light from Washington.
