Coinbase Pursues SEC Approval for Blockchain-Based Stock Offerings

Coinbase, the leading U.S.-based cryptocurrency exchange, is pursuing approval from the U.S. Securities and Exchange Commission (SEC) to offer tokenized equities, a move that could position it as a direct competitor to traditional retail brokerages like Robinhood and Charles Schwab. The initiative, described as a “huge priority” by Coinbase’s Chief Legal Officer Paul Grewal, aims to enable stock trading via blockchain technology, potentially opening a new business segment for the company.

Tokenized equities involve converting company shares into digital tokens, similar to cryptocurrencies, where investors hold tokens representing ownership rather than traditional securities. Proponents argue this could lower trading costs, speed up settlement times, and enable 24/7 trading.

Grewal emphasized that regulatory clarity, such as obtaining a “no-action letter” from the SEC, is critical to providing confidence for issuers and platforms offering tokenized equities. This clarity has been lacking, hindering institutional adoption of blockchain-based financial products.

While Grewal did not confirm whether Coinbase has formally submitted a request to the SEC or provide a timeline for a potential product launch, the move aligns with a shifting regulatory landscape. Under the Trump administration, the SEC has dropped lawsuits against several crypto firms, including Coinbase, and established a crypto task force to devise new digital asset rules, signaling a more industry-friendly approach.

Currently, tokenized equities are not available for trading in the U.S., though rival exchange Kraken recently announced plans to offer tokenized U.S. equities, called xStocks, in select international markets via the Solana blockchain. To offer tokenized equities in the U.S., Coinbase would likely need a no-action letter or exemptive relief from the SEC, as it is not registered as a broker-dealer—a point of contention in a 2023 SEC lawsuit against the company under the Biden administration.

Coinbase’s push follows earlier attempts to tokenize its own stock, $COIN, in 2021, which were halted by regulatory hurdles under former SEC Chair Gary Gensler. The company’s renewed effort reflects optimism about a more favorable regulatory environment and growing interest in blockchain-based financial innovation.

The SEC has not yet commented on Coinbase’s request.