Coinbase (Nasdaq: coins) makes a bold feature that can reshape the future of stock trading in the United States. Crypto Exchange seeks approval from US Securities and Exchange Commission (Sec) to offer tokenized shares—Gigital representations of issued shares and traded on blockchain.
If Sec Greenlight’s request, Coinbase could start a platform where users can trade with these tokenized versions of traditional shares. This would put Coinbase into direct competition with major brokers such as Robinhood (Nasdaq: Hood) and Charles Schwab (NYSE: Schw) while marking a large leap in integration of traditional financing with blockchain innovation.
What are tokenized shares?
Tokenized shares are mainly digital symbols that represent ownership in a company’s share. Instead of keeping shares conventional through a broker, investors would keep blockchain-based tokens that track the value and performance of the underlying capital.
This format offers a range of potential benefits:
- Lower trade costs
- Close to installation
- 24/7 Access to markets
According to Coinbase Chief Legal Officer Paul Gewal, this technology represents a “huge priority” for the company’s future strategy.
Regulatory roadblocks and Sec’s role
Despite the potential, tokenized shares currently encounter regulatory obstacles in the United States under current law, companies that offer securities must be registered broker retailers. Coinbase’s bid to offer these new products hinges on receiving either one without access or liberating relief from sec.
A letter without action would indicate that the SEC staff does not intend to conduct enforcement if Coinbase launches its tokenized capital offering. However, Grewal did not confirm whether Coinbase has officially submitted such a request.
Coinbase’s movement comes after a rocky regulation. Sec, during the Biden administration, the company sued in 2023 to claim to act as an unregistered securities exchange. This mood was dropped this year during the Trump administration, which has since adopted a more crypt-friendly attitude. The administration has also formed a crypto working group with a focus on developing clearer rules for digital assets.
Competition and the global race
Coinbase is not alone in this space. Rival Exchange Kraken recently announced that it would offer tokenized US shares – brand that xstocks– In selected markets outside the United States, other companies are experimenting globally with similar models, especially in jurisdictions with more defined digital asset frameworks.
The American market still remains the Holy Grail. If coinbase successfully navigates in regulatory challenges, it would be the first to bring tokenized shares to US investors on scale – potentially unlocks a huge new business segment.
Important challenges for tokenized adoption
While technology is promising, critics claim that several important obstacles remain:
- Lack of liquidity in secondary markets
- Unclear global standards for tokenized assets
- Investors’ protection and problems with openness
A new report from the World Economic Forum emphasized these challenges, warns that despite the hype, tokenized shares can meet a slow path to mainstream adoption without uniform legislative standards and robust trade infrastructure.
The bigger picture: Politics, crypto and Wall Street
The timing of Coinbase’s push is not unintentional. Former President Donald Trump has made Crypto a central speaking point in his 2024 campaign, attracted donations from industry leaders and promising regulatory reform. Bitcoin (BTC-USD) and other digital assets have increased in response to this friendlier political climate.
By adapting to this momentum, Coinbase exploits a strategic opportunity to expand in addition to crypto trade and to tokenized financial services. If succeeded, the tokenized stock run can turn coinbase from a crypto exchange into a financial platform with full service built on blockchain rails.
Final thoughts: A tip point for tokenized economy?
The introduction of tokenized shares in the United States would be a gaming exchange and offer investors new ways to collaborate with traditional markets through blockchain technology. Whether the SEC grants Coinbase the necessary approvals remains to be seen, but the consequences are huge.
If approved, Coin base May be the first major American platform to offer blockchain-based stock trading-which puts the lines between Wall Street and Web3.
Picture: Freepik
