Coinbase Seeks SEC Approval to Launch On-Chain Tokenized Stocks, Challenging Traditional Brokers like Robinhood

According to BlockBeats on June 17th, The Block made a report stating that Paul Grewal, the Chief Legal Officer of Coinbase, disclosed that the company is actively seeking a no-action letter or exemption from the SEC. The objective is to launch a blockchain-based traditional stock trading service. Tokenized stocks would allow for T+0 settlement, 24/7 trading, and lower costs. However, U.S. investors are currently prohibited from participating. This move directly poses a challenge to traditional brokers such as Robinhood and Charles Schwab. Meanwhile, Coinbase's competitor Kraken has already introduced xStocks in the EMEA region, offering more than 50 tokenized stocks and ETFs. Coinbase is continuously expanding its non-crypto asset ecosystem after launching a U.S. Amex co-branded credit card and collaborating with Shopify/Stripe on USDC payment solutions last week. In 2021, during its IPO attempt, Coinbase tried to issue tokenized COIN shares, but this was rejected by the SEC. In 2023, Coinbase faced a lawsuit from the SEC for operating without registration. Although the lawsuit was dropped earlier this year, Coinbase still does not hold a broker-dealer license. If Coinbase's current application is approved, it could break down the liquidity barriers between the traditional equity market and the crypto market, potentially accelerating the SEC's progress on a "Securities Token Classification Framework."