Coinbase Pushes to Tokenize Wall Street as It Seeks SEC Approval for Blockchain-Based Stock Trading

17 June 2025

Coinbase, the leading U.S.–based cryptocurrency exchange, is readying a strategic shift that could redefine its market positioning: the firm’s legal team is seeking approval from the U.S. Securities and Exchange Commission for a new product tokenized equities. In essence, these are digital tokens issued on a blockchain that represent shares in publicly traded companies. If approved, Coinbase would be able to offer stock trading via blockchain technology, placing it in direct competition with retail brokerages like Robinhood and Charles Schwab.

Tokenized equities are designed to embed security ownership into a digital token, unlocking blockchain’s benefits: faster settlement times, reduced transaction costs, and the ability to trade 24/7. Coinbase’s Chief Legal Officer, Paul Grewal, emphasized the project's importance, describing it as a “huge priority” for the company. Indeed, tokenizing equities has been a long-standing ambition for the crypto sector but bringing it into the U.S. financial system signals that the convergence of digital assets and traditional markets is no longer theoretical.

That said, tokenized equities remain unregulated in the U.S. To proceed, Coinbase must secure either a “no‑action letter” from the SEC or an exemption legal assurances that they can issue and trade these tokens without triggering enforcement actions. While Coinbase is not a registered broker-dealer an essential status for stock trading, the exchange believes blockchain innovation can operate within modernized frameworks. Since the SEC sued the company in 2023 over unregistered broker-dealer operations only to drop the case earlier this year Coinbase has been pushing hard for a clearer regulatory path

Beyond legal hurdles, tokenized equities carry structural challenges. A recent World Economic Forum report highlighted thin liquidity in secondary markets and unclear global regulatory standards as key obstacles. Yet Coinbase argues that formal regulatory recognition would open the floodgates providing confidence that could catalyze institutional participation. “With a no‑action letter,” Grewal said, tokenized equity systems could gain credibility and scale

What’s driving the rush now? The Trump administration has signaled pro–crypto regulatory reform. It dropped the SEC’s 2023 case against Coinbase (as well as past actions against Binance and Kraken), and formed a crypto task force aimed at creating new digital asset regulations. Bitcoin and other major tokens have surged to record highs, further emboldening exchanges to expand their scope.

For retail investors and crypto enthusiasts, tokenized equities could be revolutionary. Instead of trading during traditional market hours, users could buy and sell stocks anytime, at lower costs, and settle trades nearly instantly. The frictionless nature of blockchain, no intermediaries, no waiting could create a seamless experience. Fractionalization also becomes more accessible; even high-ticket blue-chip stocks could be available at micro-investment levels.

Competitors have noticed. Kraken recently announced an “xStocks” product in overseas markets, offering tokenized U.S. equities beyond American shores. Traditional brokers are not sitting idle. Charles Schwab and TD Ameritrade are testing blockchain-based systems in quiet pilots. But if Coinbase succeeds, it could dramatically alter the competitive landscape merging the convenience of crypto with the legitimacy of conventional equities.

Still, volatility lies ahead. The SEC under earlier leadership aggressively defined tokens as securities, leaving the crypto sector in regulatory limbo. Coinbase’s request could force a critical clarification from Washington: whether blockchain-based equities can operate alongside legacy systems or must be slowed by decades-old regulation. Market watchers are watching closely.

Regulatory developments loom large: SEC Commissioner Hester Peirce is pushing for clearer crypto guidelines, and a White House task force is drafting a comprehensive framework legislation that could make blockchain equities fully legal nationwide. In parallel, lobbying efforts are intensifying in Congress; advocates say digital assets should move under the Commodity Futures Trading Commission, rather than SEC, to reflect blockchain’s unique mechanisms .

In a sense, this is a watershed moment. Coinbase is betting that tokenized equities will cross from experimental niche to mass-market product; that blockchain’s speed, transparency, and cost efficiency can be safely adopted at scale. If the SEC grants the green light as an increasing number expect Coinbase may emerge as a bridge between digital finance and Wall Street.

Ask any executive in fintech: this is not simply innovation, it’s evolution. Coinbase’s push doesn’t just challenge the broker-dealer status quo. It reimagines securities as code. And if successful, it may inaugurate a new era where owning stock becomes as easy as sending an instant message, available around the clock, with settlement secured by cryptographically verified ledgers.

For its part, Coinbase stands ready. Its future depends not only on building a tokenization platform, but on changing the rules of the game. Whether the SEC embraces that vision or balks at its disruption could determine whether blockchains become interwoven into the fabric of mainstream finance.