Coinbase seeks SEC permission to provide stock on blockchain

Coinbase is moving to reshape the way Americans invest in stocks.

Specifically, Crypto Giant is seeking approval from the US SEC to provide tokenized stocks that digitally represent digitally representative shares of publicly traded companies via blockchain. If approved, Coinbase will be one of the first platforms in the US to enable blockchain-based stock trading. They will compete directly with traditional brokerage companies such as Robin Hood and Charles Schwab.

in Interview Along with Reuters, Coinbase Chief Legal Officer Paul Growal emphasized that tokenized stocks are the company’s highest strategic priorities.

In particular, tokenized stocks convert traditional stocks into digital tokens that can be traded on blockchain platforms. Instead of owning actual stocks, investors hold tokens representing the ownership of underlying fairness.

This innovation reduces transaction costs, allows for faster payments, and provides market access 24/7. However, critics argue that regulatory gaps, low liquidity and lack of global standards pose challenges for widespread adoption.

Coinbase’s regulatory hurdle

Coinbase is not currently a registered broker dealer. As this is a platform requirement for moving US securities forward, you must either secure “non-action letters” from the SEC or secure exempt relief to operate under coordinated guidelines.

Grewal noted that obtaining non-action letters from the SEC provides regulatory clarity. Specifically, we ensure that the agency considers such provisions to comply with and reduce enforcement risk.

Previously, Coinbase was subject to SEC enforcement action in 2023. After more than a year of legal battle with the SEC that it acted as an unregistered broker-dealer, the agency dropped the lawsuit earlier this year under new leadership.

Other crypto platforms, such as Gemini, Tron and Robinhood, which the agencies have previously appealed, have also benefited from the mitigation. The move confirms the updated location of the SEC’s digital assets and the companies pursuing them.

Improve your landscape will open doors for Coinbase’s latest products

Ease of life comes in the background of the Trump administration’s support for increased support for the crypto industry and restructuring of SEC leadership.

Under the new administration, the government hosted industry leaders in the White House and established a crypto-focused task force to create a new regulatory framework.

In particular, Grewal did not confirm whether Coinbase had submitted an official application. However, the effort highlights Coinbase’s ambition to expand beyond crypto to a broader financial system.

Companies like Kraken already offer US stocks that have been tokenized in overseas markets. Meanwhile, Coinbase shows its eagerness to hold off the green light from Washington and lead the charge in the soil of the home.