• Coinbase aims to tokenize equities for 24/7 blockchain-based trading access.
  • The exchange needs SEC approval before launching tokenized stock offerings.
  • Regulatory clarity could unlock wider institutional participation in tokenized assets.
  • Kraken launched xStocks abroad, but U.S. access remains limited due to SEC rules.

Coinbase is preparing to enter the tokenized equities market, aiming to offer stock trading through blockchain technology in the United States. 

The crypto exchange is pursuing approval from the U.S. Securities and Exchange Commission to launch the service. If cleared, the move could mark a shift in how traditional equities are traded, blending blockchain with mainstream finance. 

The plan signals Coinbases push to expand beyond cryptocurrencies and challenge existing retail brokers. Its success hinges on regulatory clarity from the SEC before any product rollout.

According to Reuters, Coinbases Chief Legal Officer, Paul Grewal, revealed the companys interest in launching tokenized stock offerings during a recent interview. The concept involves converting shares of traditional companies into blockchain-based tokens that represent ownership. 

These tokens would be traded like cryptocurrencies, allowing faster settlements and 24/7 access for investors.

To operate legally, Coinbase needs either a no-action letter or exemptive relief from the SEC. This would assure that the regulator will not take enforcement action if Coinbase proceeds. Without it, the exchange cannot legally offer tokenized securities in the U.S.

Coinbase Eyes Regulatory Green Light

Grewal described tokenized equities as a major priority for Coinbases future. He noted that regulatory assurance could drive broader institutional interest and innovation. 

However, he did not confirm whether an official request had already been submitted to the SEC or share a timeline for the service launch.

Traditionally, firms that offer securities trading must register as broker-dealers, a status Coinbase does not hold. The SEC sued the company in 2023 for allegedly acting as an unregistered broker, though the case was dropped earlier this year. Coinbase now seeks formal clearance before expanding its offerings.

Although several firms are exploring tokenized equities, U.S. investors currently have limited access. Kraken, a rival exchange, recently launched xStocks, tokenized versions of U.S. equities, but only outside the U.S. market.

The World Economic Forum recently identified a lack of liquidity and global standards as key challenges for adoption. These concerns underline the importance of regulatory clarity before any U.S. launch.

Coinbases entry into tokenized equities could transform how traditional assets are accessed and traded. For now, the company waits for the SECs decision , which will determine whether this blockchain-powered vision can move forward.