Coinbase Revives Plan to Tokenize Stock Amid Regulatory Shift

Coinbase, the leading cryptocurrency exchange, is reviving its efforts to tokenize its own stock, $COIN, as part of a broader push to bring security tokens to the U.S. market. The company first attempted this initiative in 2020 but abandoned it due to regulatory hurdles. However, with a newly formed crypto task force at the SEC, Coinbase sees a renewed opportunity to integrate blockchain-based securities into traditional finance.

During the Morgan Stanley TMT Conference, Coinbase's Chief Financial Officer, Alesia Haas, expressed optimism about regulatory developments. She stated, "I now believe that our U.S. regulators are looking for product innovation and looking to move forward." Haas revealed that Coinbase had initially planned to go public by issuing a security token representing its $COIN stock, aligning with its vision of integrating blockchain into traditional finance. However, regulatory hurdles, including the lack of U.S. exchanges licensed to trade security tokens and the need for additional approvals, forced the company to abandon the plan in favor of a traditional direct listing in April 2021.

Now, Coinbase sees potential to expand its offerings. Haas suggested that they could introduce internationally available products to the U.S. market, which are already widely used by crypto traders globally. Security tokens, which operate like traditional securities but trade on blockchain networks, can provide investors with voting rights and profit-sharing mechanisms while improving transaction efficiency.