Coinbase, one of the well-known crypto exchanges, is attempting to obtain approval from the U.S. Securities and Exchange Commission (SEC) to sell tokenized equities to their users. Tokenized equities are digital versions of regular company shares. Rather than holding ordinary stock, investors would hold virtual tokens representing company shares.
Whilst, tokens are similar to cryptocurrencies and can be exchanged on a blockchain. Coinbase Chief Legal Officer Paul Grewal informed Reuters that this is the company’s number one priority. If approved, it would enable Coinbase to move into stock trading, placing it side by side with companies such as Robinhood and Charles Schwab.
Currently, tokenized stocks can not be traded in the U.S. Coinbase would need a special kind of permission, called a ‘no action letter’ from the SEC, which means the agency won’t take legal action if coinbase goes ahead.
Coinbase is not currently registered as a broker-dealer, which is usually required to offer stock trading. In 2023, the SEC sued Coinbase over this. But after the new Trump administration, the SEC has dropped the case.
However, it is unclear when Coinbase will launch tokenized stock trading or if it has officially applied to the SEC. The company still believes getting SEC comfort is key for broader adoption of blockchain in finance.
Also Read: Gemini and Coinbase to Tap EU Market With MiCA Licenses
