In a recent post on the X platform, Jesse Pollak, developer of Coinbase’s Ethereum layer-2 network, Base, hinted that the exchange is exploring making tokenized shares of its stock available to users in the United States. This move would allow US residents to purchase and hold tokenized COIN shares, just like non-US users can through platforms such as Backed.
Tokenization of COIN Shares on Base
As reported by Pollak on January 3rd, tokenized COIN shares are already available to non-US users through various protocols. However, the availability of these tokenized shares for US users is still in its exploratory phase. According to Pollak, Coinbase has "no concrete plans right now" but is working towards understanding how to navigate US regulations.
Regulatory Clarity and Improvements Needed
To unlock this feature for all users, including those in the United States, regulatory clarity and improvements are necessary. As Pollak emphasized, "We need regulatory clarity and improvements that embrace on-chain as an open platform to unlock this for everyone." This underscores the importance of clear guidelines and regulations for tokenized securities in the US.
The Potential Market Opportunity
The market opportunity for tokenized Real-World Assets (RWAs), including tokenized securities, is substantial. According to Colin Butler, Polygon’s global head of institutional capital, collectively, these assets represent a $30 trillion market opportunity globally. This highlights the potential for tokenization to transform US markets and provide new investment opportunities.
US Crypto Stocks and Regulatory Pressure
In November, following Donald Trump’s victory in the presidential election, US crypto stocks such as COIN saw significant gains. Many experts believe that Trump’s win will benefit the industry, leading to reduced regulatory pressure from agencies like the SEC. As Michale Miller, an equities researcher at Morningstar, noted, "We see Coinbase as a beneficiary of the election results as the firm has been struggling with regulatory pressure from the SEC."
The Importance of Clear US Rules
Clearer US rules and regulations are essential for crypto adoption, particularly for tokenized securities like COIN. Under President Joe Biden, the SEC has brought numerous enforcement actions against cryptocurrency companies for purported violations of securities laws. Analysts argue that clearer guidelines would reduce regulatory uncertainty and promote growth in the industry.
Legislative Lagging Behind
While some progress has been made in shaping US crypto regulations, legislation is lagging behind other major jurisdictions. As investment bank Citi noted in a December research note, "The US has at least begun to try moving away from regulation by enforcement toward a broader framework passed by Congress." However, the pace of legislative action remains slow.
Conclusion
Coinbase’s consideration of tokenized shares on Base for US users is an exciting development. As Pollak emphasized, this move could unlock new investment opportunities and promote growth in the industry. However, regulatory clarity and improvements are necessary to facilitate this feature. With a substantial market opportunity at stake, clear US rules and regulations will play a crucial role in shaping the future of tokenized securities.
The Future of Tokenization
As Pollak aptly put it, "Every asset in the world will be on Base." This vision for the future highlights the potential for tokenization to transform markets globally. With clearer US rules and regulations, the industry can move forward with confidence, unlocking new opportunities for investors and promoting growth.
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