Coinbase seeking US SEC approval to offer blockchain-based stocks

Written by Hana Lang

(Reuters), Coinbase seeks to obtain a green light from the American Securities and Stock Exchange Committee to provide “symbolic shares” to its customers, the chief legal officials at Crypto Exchange of Reuters stated.

If it is granted, this step will allow shares trading effectively via Blockchain technology, and put them in direct competition with retail selements such as Robinhood and Charles Schwab, and can open a new business sector for Coinbase.

Paul Ghrouwal, the chief legal official of Coinbase, said the concept is a “tremendous priority.”

Tokeenizing Equits is a process in which the company’s shares are converted into a digital code, similar to how to trade cryptocurrencies. Instead of keeping securities directly, investors carry symbols that represent securities ownership.

Supporters said that distinctive stocks can reduce trading costs, faster settlement and facilitate trading around the clock.

Critics said that there are many gaps that must be treated before symbolic shares are commonly circulated. The World Economic Forum, in the report last month, indicated the lack of sufficient secondary market liquidity, in addition to the lack of a clear global standard as a major challenge for adoption.

SEC actor did not immediately respond to a request for comment.

Currently, distinctive shares are not available for trading in the United States, but many companies try this concept. The Crypto Excination Kaken competition said last month that it launches the distinctive symbols of American stocks, which are called XSTOCKS, which will be available in selected markets outside the United States.

To provide symbolic stocks in the United States, Coinbase will need to give a “speech not procedure” or an exemption from the Supreme Education Council, as the securities organizer undertakes not to follow an enforcement procedure if Coinbase has advanced forward.

Usually, companies that offer securities should be registered as a leader of the brokers. SEC filed a lawsuit against the company in 2023 during the administration of former President Joe Biden, claiming that it was working as one without registration of the agency. The Securities and Stock Exchange Commission during the era of President Donald Trump administration brought down this issue this year.

Coinbase acquired a trader’s mediator in 2018, providing her with a license to provide similar services, but this dependent was not active.

A letter will be issued without taking action by SEC employees in response to a request from a company like Coinbase, saying that the Supreme Education Council will not object to a specific offer and will not recommend an enforcement if the company has advanced forward with this offer.