TLDR
- Coinbase is seeking approval from the SEC to offer tokenized stock trading in the United States.
- The company aims to expand its services by allowing blockchain-based trading of traditional equities.
- Coinbase would need either a no-action letter or exemptive relief from the SEC to proceed.
- Tokenized equities could enable faster settlement, lower costs, and 24/7 trading opportunities.
- Coinbase is not currently registered as a broker-dealer and cannot offer securities under existing regulations.
Coinbase is pursuing regulatory clearance to offer tokenized stock trading in the United States. The company aims to expand its platform to include blockchain-based representations of equities, which could place Coinbase in direct competition with retail brokerages that currently dominate equity trading.
By requesting regulatory clarity from the U.S. Securities and Exchange Commission (SEC), Coinbase plans to enter a new business segment. The move signals its efforts to diversify beyond cryptocurrency offerings. If approved, Coinbase could significantly reshape how securities are bought and sold in digital markets.
The proposal involves tokenizing traditional stocks, allowing users to trade equity-backed tokens on the blockchain. Tokenized stocks could enable faster settlements, round-the-clock trading, and reduced intermediary costs. Coinbase is focusing on this as a strategic expansion opportunity.
Coinbase Targets Equity Tokenization Through SEC Compliance
Coinbase is exploring tokenized equities as a regulated financial product under SEC oversight. It seeks either a no-action letter or exemptive relief from the agency. Both options would give Coinbase legal comfort in launching such services without enforcement risk.
A no-action letter would indicate the SEC’s staff does not intend to pursue legal action if Coinbase proceeds. The exemptive relief would formally allow activity outside current rules while remaining within legal bounds. Both would require thorough regulatory justification and compliance.
Coinbase is not currently registered as a broker-dealer with the SEC. Therefore, it cannot legally offer securities trading under current law. This makes formal SEC clearance a necessary step before moving forward with any tokenized equity service.
Competing Platforms Move Ahead Outside the U.S. Market
Several crypto firms have already started experimenting with tokenized equity trading in overseas markets. Kraken recently announced its own tokenized equity offering called xStocks. Due to regulatory constraints, these products are limited to jurisdictions outside the United States.
Tokenized equities convert traditional shares into digital tokens that represent ownership and can be traded like cryptocurrencies. This method enables greater flexibility in trading times and settlement cycles. However, regulatory uncertainty continues to limit adoption inside the U.S.
The World Economic Forum cited a lack of global standards and limited secondary-market liquidity as key obstacles. These challenges could hinder widespread rollout despite growing interest from financial institutions. Standardization and policy alignment remain central to broader implementation.
Regulatory Landscape Shifts Under Trump Administration
The SEC has adjusted its approach to crypto regulation following the change in presidential administrations. Several lawsuits against crypto companies, including Coinbase, were dropped earlier this year. These developments followed new appointments and policy changes aimed at easing restrictions.
Under the previous administration, the SEC had sued the exchange for allegedly acting as an unregistered broker-dealer. That case was dismissed in 2025 as regulatory direction shifted. Coinbase now appears more optimistic about launching new regulated products.
