Coinbase Wants SEC Approval to Offer Tokenized Stocks

Coinbase is exploring new ground as it works toward offering tokenized equities in the United States. The crypto exchange is in discussions with the U.S. Securities and Exchange Commission (SEC) to secure approval for blockchain-based stock trading, according to a Reuters report.

Good to know

• Coinbase aims to offer tokenized equities, which are not yet tradable in the U.S..
• The company may need a no-action letter or exemptive relief from the SEC.
• Tokenized equities could allow for 24/7 trading and lower transaction costs.

Tokenized equities convert traditional shares into digital tokens on a blockchain. These tokens represent ownership in real-world stocks but allow for faster and potentially cheaper trading. They also open the door for round-the-clock trading, a feature not possible with traditional stock exchanges.

While tokenized equities are not currently allowed in the U.S., Coinbase joins other firms like Kraken that are showing interest in the space.

SEC talks still in progress

Reuters reported that Coinbase is speaking with regulators to gain either a no-action letter or exemptive relief. These approvals would assure the company that it can move forward without facing legal action from the SEC.

Coinbase’s chief legal officer, Paul Grewal, noted the importance of regulatory clarity. “With a no action letter, an issuer of a tokenized equity or a platform that wishes to offer secondary trading in those equities can have some confidence, some comfort, that the SEC has adopted its view of why this product is compliant. It’s that confidence that has been lacking so far, and I think really held back a lot of the institutional adoption…”

Grewal did not confirm whether Coinbase has officially filed a request with the SEC.

If approved, the move would allow Coinbase to compete more directly with platforms like Robinhood, which already support both stock and crypto trading. For Coinbase, expanding into tokenized equities could bridge the gap between traditional finance and crypto, offering a new layer of service for users and institutions alike.