The crypto big is looking for regulatory clearance to supply tokenized equities, a blockchain-based twist on inventory buying and selling that would disrupt legacy brokerages and check the SEC’s evolving stance beneath President Donald Trump’s pro-crypto regime.
After dodging a high-stakes lawsuit beneath former President Joe Biden’s SEC, Coinbase is now pushing the envelope. In an interview with Reuters, Coinbase’s chief authorized officer Paul Grewal stated the crypto trade is looking for formal regulatory approval to supply tokenized equities.
Whereas Grewal stopped wanting confirming whether or not Coinbase has submitted a proper request, he stated the initiative is a “huge priority” and contingent on a no-action letter or related exemptive reduction from the SEC. If authorised, the transfer would pit Coinbase instantly towards entrenched retail brokerages like Robinhood and Charles Schwab, marking its boldest incursion but into mainstream finance.
The promise and pitfall of tokenized shares
At stake is greater than only a new product line. Coinbase’s push into tokenized equities would mark the primary severe try to carry Wall Avenue onto the blockchain beneath the Trump-era SEC, which has adopted a noticeably softer stance towards crypto companies.
For years, crypto advocates have argued that blockchain may make conventional finance sooner, cheaper, and extra clear. Tokenized equities put that idea to the check. Not like standard inventory buying and selling, the place shares take days to settle, brokers take a lower, and markets shut down at 4 PM New York time, blockchain-based equities promise near-instant settlement, decrease charges, and 24/7 buying and selling.
Coinbase’s pitch to the SEC hinges on that premise: carry the previous monetary world onto the rails of the brand new. However doing so requires regulatory blessing within the type of a no-action letter, basically a corridor go from the SEC, assuring that the company gained’t pursue enforcement, even when present legal guidelines stay murky.
That corridor go is the whole lot. With out it, Coinbase dangers repeating historical past. The SEC has spent years treating crypto as a rogue asset class. And even beneath Trump’s friendlier regime, the company might hesitate to greenlight a product that blurs the road between shares and digital belongings.
Nonetheless, the panorama is shifting. The SEC beneath Trump has scrapped lawsuits towards Binance, Kraken, and others, and now seems extra open to rewriting the rulebook. That political shift has emboldened companies like Coinbase to revive long-shelved ambitions.
And whereas rivals corresponding to Kraken are already providing tokenized shares outdoors U.S. borders, Coinbase desires to do it in America, transparently and above board.