Coinbase Eyes SEC Approval to Launch Blockchain-Based Stock Trading
Coinbase, the leading U.S.-based cryptocurrency exchange, is actively seeking approval from the U.S. Securities and Exchange Commission (SEC) to begin offering tokenised equities, according to Chief Legal Officer Paul Grewal. If approved, this initiative would allow Coinbase to tokenise publicly traded stocks, enabling customers to buy and sell blockchain-based stock tokens directly on its platform.
What Are Tokenised Equities?
Tokenised equities refer to shares of a company that have been digitised and represented on a blockchain. These digital tokens mirror the value and ownership of actual stock shares but offer added benefits such as
- Lower trading costs
- Real-time settlement
- 24/7 trading access
- Fractional ownership flexibility
Unlike traditional stock ownership, where shares are held in broking accounts, token holders retain their assets on a blockchain-based ledger.
A Potential Game-Changer for Coinbase and Wall Street
If the SEC grants Coinbase either a “no action letter” or exemptive relief, the company could legally offer tokenised equity trading in the U.S., placing it in direct competition with Robinhood, Charles Schwab, and other traditional brokerages.
Grewal emphasised the significance of this development:
“It’s a huge priority,” he stated.
“With a no action letter, an issuer of a tokenized equity or a platform… can have some confidence that the SEC has adopted its view of why this product is compliant.”
Regulatory Hurdles and Legal Context
Coinbase is currently not registered as a broker-dealer, a requirement for securities trading in the U.S. The SEC previously sued Coinbase in 2023 under the Biden administration, alleging that it was operating as a broker-dealer without proper registration. That case was dropped under the Trump administration in 2025.
A no-action letter from the SEC would assure Coinbase that regulators do not plan to enforce action against it for offering tokenised equities, essentially opening the door for a legal and compliant launch.
Industry Landscape and Competitive Pressure
Other firms, such as Kraken, have also begun exploring tokenised equities, with Kraken recently launching xStocks in select international markets. However, no U.S. exchange currently offers tokenised equity trading due to the existing regulatory grey area.
A recent World Economic Forum report highlighted several key challenges for tokenised equity adoption, including
- Lack of secondary market liquidity
- Absence of a global regulatory standard
- Legal ambiguity on token ownership and custodianship
What’s Next for Coinbase?
While Grewal did not disclose whether Coinbase has formally submitted its SEC request or when the product might launch, he emphasised the urgent need for regulatory clarity:
“That confidence has been lacking so far and really held back a lot of institutional adoption,” he said.
If approved, this move could reshape the future of stock trading, offering a seamless blend of traditional finance and blockchain technology, and cementing Coinbase as a pioneer in digital asset innovation.
