Coinbase Seeks SEC Approval to Offer Tokenized Equities
Coinbase is aiming to expand its offerings by seeking approval from the U.S. Securities and Exchange Commission (SEC) to provide customers with access to tokenized equities, according to the exchange’s Chief Legal Officer, Paul Grewal, in comments made to Reuters.
If approved, the move would enable Coinbase (COIN.O) to bring stock trading to the blockchain, putting it in direct competition with established retail brokerages like Robinhood (HOOD.O) and Charles Schwab (SCHW.N). This could potentially open a new business vertical for the crypto exchange.
Grewal emphasized the significance of the initiative, calling it a “huge priority.”
Tokenized equities involve converting traditional shares into digital tokens that represent ownership, allowing them to be traded similarly to cryptocurrencies. Supporters of the concept say it could lower trading costs, accelerate settlement times, and allow for 24/7 trading.
However, critics warn that several hurdles remain. A World Economic Forum report published last month cited two key barriers to broader adoption: the lack of secondary-market liquidity and the absence of unified global standards.
As of now, tokenized equities cannot be traded within the United States. While several companies are testing the waters, most offerings are limited to overseas markets. For example, Coinbase rival Kraken recently announced the launch of U.S. equity tokens, called xStocks, available in select international jurisdictions.
To offer tokenized stocks domestically, Coinbase would require either a “no-action letter” or exemptive relief from the SEC—effectively a promise from the regulator not to take enforcement action if Coinbase proceeds with the offering.
Generally, firms trading securities in the U.S. must register as broker-dealers. Coinbase had faced legal trouble over this in the past: the SEC sued Coinbase in 2023 under President Joe Biden, alleging it operated as an unregistered broker. However, under President Donald Trump’s administration, the lawsuit was dropped earlier this year.
Coinbase had acquired a broker-dealer license back in 2018, though that affiliate has remained inactive. A no-action letter would represent SEC staff’s informal stance that a particular product or activity would not result in enforcement action.
Grewal did not disclose whether Coinbase has already filed a formal request or set a timeline for the rollout. But he explained the importance of regulatory clarity:
“With a no-action letter, an issuer of a tokenized equity or a platform that wishes to offer secondary trading in those equities can have some confidence, some comfort, that the SEC has adopted its view of why this product is compliant,” Grewal said.
“It’s that confidence that has been lacking so far, and I think really held back a lot of the institutional adoption” of blockchain and crypto, he added.
This development follows a broader shift in crypto policy under President Trump, who has appointed crypto-friendly regulators and welcomed industry leaders at the White House. As a result, cryptocurrencies have performed well, with bitcoin hitting record highs this year.
The SEC, now under Trump, has also dropped high-profile lawsuits against firms like Coinbase, Binance, and Kraken, and launched a crypto task force to develop clearer rules for the digital asset space.
