After stablecoins, is "stable stocks" next? Coinbase (COIN.US) is seeking SEC approval for tokenizing stocks.

Just as the market closely watches stablecoins, "coin circle" technology companies have set their sights on US stocks. On Tuesday local time, Coinbase (COIN.US), a cryptocurrency exchange and a newly listed S&P 500 component stock, revealed that the company is seeking approval from the U.S. Securities and Exchange Commission (SEC) to launch a "tokenized equities" service. It is not difficult to explain that stablecoins refer to encrypted tokens backed by assets such as the US dollar and US Treasury bonds, while tokenized equities refer to digital assets backed by the equity of listed companies. In such transactions, investors do not directly hold securities, but hold tokens representing ownership of securities. In order to move forward with this business, Coinbase will need to obtain a "no-action letter" or exemption permit from the U.S. SEC. This means that the securities regulator promises not to take enforcement action against Coinbase for pursuing this type of business. Grueval said, "Through a no-action letter, the issuer of tokenized equities or a secondary trading platform looking to provide such assets will gain some confidence and peace of mind, as the SEC will indicate its reasons for compliance. It is this confidence that is still lacking that I think is hindering the widespread adoption of cryptocurrencies and blockchain technology in institutions." If approved, Coinbase would be able to provide stock trading services through blockchain, similar to competing with internet brokers such as Robinhood and Charles Schwab Corp. Grueval did not disclose whether Coinbase had already submitted a formal request to regulators, nor did he provide a timeline for potential product launches. In recent months, the newly appointed U.S. SEC has been significantly changing its stance on the cryptocurrency industry, including withdrawing lawsuits against numerous companies such as Coinbase, Binance, and Kraken, and establishing a crypto task force responsible for developing new regulations for digital assets. Of course, unlike stablecoins that bridge traditional fiat currencies and cryptocurrencies, the tokenization of publicly traded stocks is currently a subject of considerable controversy. Supporters believe that security tokens can reduce transaction costs, achieve fast settlement, and enable trading around the clock. However, critics also point out that there are still many issues to be resolved before tokenizing listed company stocks. For example, a report from the World Economic Forum last month highlighted a lack of liquidity in secondary markets and a lack of clear global standards as two major challenges to promoting such applications. Currently, providing tokenized equities services is not allowed within the U.S. However, last month, Coinbase's competitor, the U.S. cryptocurrency exchange Kraken, announced that it would offer tokenized shares of popular U.S. stocks such as Apple Inc., Tesla, Inc., NVIDIA Corporation, gold ETFs, and S&P 500 ETFs to non-U.S. customers. Kraken also stated that one of the benefits of tokenization is the ability to achieve true round-the-clock trading - 24 hours a day, 7 days a week, even when the U.S. stock market is closed. Earlier this year, Kraken announced its entry into the U.S. internet broker business, launching commission-free stock trading services in nine U.S. states and the District of Columbia, with plans to expand to the entire United States as well as the UK, Europe, and Australia markets. This article is a repost from "Cailian Press." Editor: Liu Jiayin.