American cryptocurrency exchange Coinbase is entering a new phase of its development and is seeking approval from the U.S. Securities and Exchange Commission (SEC) to launch trading in tokenized stocks. This move could significantly change the landscape of traditional investing, and Coinbase itself could become a direct competitor to companies such as Robinhood and Charles Schwab.
What are tokenized stocks and why does Coinbase need them
Tokenized stocks are digital tokens, each of which represents ownership of real shares of public companies. This model allows investors to do without physical ownership of shares and make transactions directly on the blockchain. This can not only reduce operating costs, but also provide 24/7 trading without the need for intermediaries.
According to Coinbase General Counsel Paul Grewal, the launch of tokenized assets is one of the company’s key strategic goals for the near future. In an interview with Reuters, he emphasized that this trading format has the potential to significantly simplify and reduce the cost of investment processes.
Legal Barriers and the SEC’s Position
Despite the technological readiness, the idea’s implementation in the U.S. faces regulatory uncertainty. Currently, trading tokenized shares is not allowed in the U.S. In order to start offering such products, Coinbase needs to receive clear guarantees from the SEC that the agency will not interpret these actions as a violation of securities laws.
Gruel explained that the lack of legal clarity is holding back not only Coinbase, but also many other market participants, including issuers of tokenized securities and platforms for their secondary trading. These companies must be sure that they comply with all legal requirements before entering the market.
Experience of other players and international practice
Despite the slow progress in the US, international projects in the field of tokenization have already started. For example, the crypto exchange Kraken announced the launch of its own project xStocks — tokens reflecting US stocks, but available only outside the US. This underscores the growing interest in this asset class and opens the way for global investments based on the blockchain.
Registration Requirements and Litigation History
In the United States, companies providing access to securities trading are required to be registered broker-dealers. In 2023, the SEC filed a lawsuit against Coinbase, accusing the exchange of servicing American clients without proper registration. However, the case was later closed under the new administration led by Donald Trump, which may indicate a potential change in the regulator’s attitude towards the crypto industry.
Return to San Francisco and a corporate strategy overhaul
Amid these events, Coinbase announced a return to a more traditional corporate structure, abandoning its fully remote model. In May, the company’s management announced plans to open a new office in San Francisco, which may signal a rethinking of the approach to business and regulation.
The Future of Tokenized Assets in the US
If Coinbase succeeds in getting the green light from the SEC, it could be a turning point for the entire industry. The ability to officially trade tokenized shares in the U.S. will not only open up a new audience for investment, but will also encourage traditional financial institutions to switch to blockchain models.
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