If approved, this move could enable the company to provide stock trading via blockchain technology, competing with retail brokerages and opening up a new business segment.
According to Coinbase representatives, this initiative is considered a significant priority for the company. The SEC has not provided any additional comments on the announcement, and it remains unknown whether Coinbase has already submitted an official request or when a proposal might be launched.
The concept of tokenised equity involves shares from a company being transformed into tokens that represent ownership, akin to how crypto assets are traded.
Advocates argue that this approach could reduce costs and improve settlement times while allowing for 24/7 trading. However, critics point out the need for addressing certain gaps, such as ensuring sufficient secondary-market liquidity and establishing a clear global standard.
Currently, tokenised equities are not yet available in the US market despite some firms experimenting with this idea, including Coinbase’s competitors. For example, crypto exchange Kraken announced a partnership with Backed to launch xStocks on the Solana platform, making tokens of US equities accessible in specific markets outside the US.
To deliver this new service, Coinbase would need the SEC’s permission through a no-action letter or exemptive relief. Given that the company is not registered as a broker-dealer and was sued by the SEC over operating without proper registration in 2023, obtaining such approval is crucial.
The push for this innovation comes at a time when President Trump is aiming to restructure US crypto policies following his campaign emphasis on industry support. Trump has appointed pro-industry regulators and hosted key figures from the crypto world at the White House. This has resulted in positive reactions from cryptocurrencies, with Bitcoin hitting new all-time highs.
Source: Link