Coinbase Seeks SEC Approval for Tokenized Equities Trading

June 17, 2025 – New York, NY – Coinbase is seeking approval from the U.S. Securities and Exchange Commission (SEC) to offer tokenized equities to its customers, according to Chief Legal Officer Paul Grewal.

If granted, this move would allow Coinbase to enable stock trading through blockchain technology, positioning it against retail brokerages like Robinhood and Charles Schwab. Grewal emphasized that tokenized equities are a “huge priority” for the company.

Tokenizing equities involves converting company shares into digital tokens, similar to how cryptocurrencies are traded. Investors would hold tokens representing ownership instead of actual securities. Proponents believe this method could lower trading costs, speed up settlement, and allow for 24/7 trading.

While the concept is gaining interest, critics warn of significant hurdles. A recent report by the World Economic Forum highlighted issues such as insufficient secondary-market liquidity and the absence of global standards as major obstacles for widespread adoption.

Currently, tokenized equities are not available in the U.S., although some firms are exploring the idea. Kraken, another crypto exchange, announced last month that it plans to launch xStocks, tokenized U.S. equities, in select international markets.

For Coinbase to introduce tokenized equities domestically, it would need either a “no action letter” or exemptive relief from the SEC. The SEC’s commitment would assure Coinbase that it would not face enforcement if it proceeds. Normally, firms offering trading in securities must register as broker-dealers.

Coinbase, which acquired a broker-dealer in 2018, has been under scrutiny after an SEC lawsuit was filed against it in 2023. The suit accused Coinbase of operating as a broker-dealer without registration, but the SEC later dropped the case.

A no-action letter indicates that SEC staff would not object to a company’s offering. Grewal noted that such assurance could enhance confidence in the compliance of tokenized equities and encourage institutional adoption of crypto technologies.

The push for tokenized equities comes as the political climate around cryptocurrencies shifts under the Trump administration, which has been more favorable toward the industry. As new regulatory frameworks are formed, the SEC has ceased several legal actions against crypto firms, marking a change from past practices.

Grewal did not reveal whether Coinbase has submitted a request to the SEC or when a potential product launch might occur. However, he asserted that obtaining a no-action letter could help bolster market confidence in the adoption of these digital equity offerings.