Crypto Exchange Pushes for Regulatory Green Light on Tokenized Equities
Coinbase, a leading cryptocurrency exchange, is actively seeking approval from the U.S. Securities and Exchange Commission (SEC) to introduce blockchain-based stock trading, known as “tokenized equities,” to its platform. This move, confirmed by Coinbase’s chief legal officer Paul Grewal, would allow users to buy and sell shares represented as digital tokens directly on the blockchain, bypassing traditional stock market infrastructure.
If granted, this regulatory approval would position Coinbase in direct competition with established retail brokerages such as Robinhood and Charles Schwab, potentially opening a new revenue stream for the crypto giant. Grewal emphasized that this initiative is a top priority for Coinbase, reflecting the company’s ambition to bridge the gap between digital assets and conventional finance.
Tokenized equities involve converting company shares into digital tokens, enabling investors to own and trade these tokens rather than physical stock certificates. Proponents argue this approach could lower trading costs, speed up settlement times, and enable round-the-clock trading, features not currently available in traditional stock markets. However, critics highlight unresolved challenges, such as limited secondary-market liquidity and the absence of clear global regulatory standards, as significant hurdles to mainstream adoption.
Coinbase’s proposal comes at a time of shifting regulatory attitudes in the U.S., with the SEC under President Trump adopting a more crypto-friendly stance, including dropping previous lawsuits against several crypto firms. While rival exchanges like Kraken have already announced plans to offer tokenized stocks internationally, Coinbase is aiming to launch such services within the United States, pending regulatory clarity.
Grewal did not specify whether Coinbase has formally filed its request or when the product might launch, but he noted that a favorable “no-action” letter from the SEC would provide the necessary assurance for the company to proceed. This regulatory milestone could mark a significant step toward integrating blockchain technology into mainstream financial markets.
