Coinbase, one of the world’s leading cryptocurrency exchanges, is now aiming to revolutionize traditional stock trading. The company is currently seeking approval from the U.S. Securities and Exchange Commission (SEC) to offer “tokenized equities” — a digital form of traditional stocks that can be traded on a blockchain just like cryptocurrencies.
If approved, this move could allow Coinbase to compete directly with established brokerage firms such as Robinhood and Charles Schwab. More importantly, it could unlock a completely new revenue stream for the crypto exchange, at a time when the lines between traditional finance and blockchain are beginning to blur.
Tokenized equities represent shares of real companies as digital tokens on the blockchain. Instead of owning physical stock certificates or traditional brokerage-held shares, investors would hold tokens that reflect ownership of the underlying assets. These digital versions of stocks could offer key benefits — faster settlement times, lower trading fees, and the possibility of 24/7 trading, unlike the limited hours of Wall Street.
“This is a huge priority for us,” said Paul Grewal, Coinbase’s Chief Legal Officer, in an interview with Reuters. “Tokenized equity trading could be the gateway to modernizing the financial system.”
But the path to approval is complicated.
Tokenized equities are not yet legal for trading in the United States. For Coinbase to offer them, it would need special permission — either through a “no action letter” or exemptive relief from the SEC. This essentially means that the SEC would promise not to take enforcement action against Coinbase if it launches the product under specified conditions.
Coinbase is not currently registered as a broker-dealer, a legal status required to offer securities trading. The company faced a lawsuit in 2023 from the SEC under President Biden’s administration, accusing it of acting as an unregistered broker. However, that lawsuit was dropped earlier this year under President Trump, who has taken a far more crypto-friendly stance. His administration has since disbanded several crypto lawsuits and formed a digital assets task force to explore new regulatory frameworks.
Although Grewal did not confirm whether Coinbase has formally submitted its request to the SEC, he emphasized the importance of clarity. “With a no-action letter, a company can feel confident that the SEC supports the structure of a compliant product,” he said.
“It’s that regulatory confidence that has been missing — and it’s what has stalled institutional interest in blockchain for years.”
Meanwhile, competitors like Kraken have already taken steps. The crypto exchange recently announced plans to launch tokenized versions of U.S. stocks — called xStocks — but only in markets outside the United States.
A report from the World Economic Forum recently highlighted major hurdles for tokenized assets, such as the lack of standardized global rules and limited secondary market liquidity.
Still, with a more favorable political climate and growing demand for crypto-traditional finance integration, Coinbase’s bold new push could be the beginning of a broader transformation in how people invest.
