Coinbase seeking SEC approval to offer blockchain-based stocks

Core Viewpoint - Coinbase is seeking approval from the SEC to offer "tokenized equities," which is a significant priority for the company [1][4]. Group 1: Tokenized Equities Concept - Tokenizing equities involves converting company shares into digital tokens, allowing investors to hold tokens that represent ownership instead of the securities directly [2]. - Proponents argue that tokenized equities could lower trading costs, enable faster settlement, and allow for 24/7 trading [4]. Group 2: Regulatory Challenges - Currently, tokenized equities are not available for trading in the U.S., with firms like Kraken experimenting with the concept in select markets outside the U.S. [6]. - To offer tokenized equities in the U.S., Coinbase would need a "no action letter" or exemptive relief from the SEC, which would prevent enforcement actions against the company [7][10]. - The SEC has previously sued Coinbase for operating as an unregistered broker-dealer, but this case was dropped under the Trump administration [9][14]. Group 3: Market Implications - If granted approval, Coinbase could offer stock trading via blockchain technology, positioning itself against retail brokerages like Robinhood and Charles Schwab, potentially opening a new business segment [12][15]. - The current political climate, with Trump appointing industry-friendly regulators, may favor the approval of such initiatives, as seen by the favorable market reaction to cryptocurrencies [13].