Coinbase plans to tokenize $COIN stock with updated security token push

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Coinbase is updating its efforts to tokenize its own $Coin as part of a broader push to bring security tokens into the US market, an initiative that it first attempted in 2020 but abandoned due to regulatory hurdles.

With the newly formed Cryptody Task Force at the SEC, the company is seeing new opportunities to integrate blockchain-based securities into traditional finance.

Alesia Haas, Chief Financial Officer of Crypto Exchange Company, expressed optimism about the development of regulations at the Morgan Stanley TMT conference.

“I believe that now U.S. regulators are looking for product innovation and are trying to move forward,” Haas said.

Haas revealed that Coinbase was planning to first issue a security token representing $Coin stock, revealing it in line with its vision of integrating the blockchain into traditional finance.

However, regulatory hurdles including the lack of exchanges in the US that were allowed to trade security tokens and the need for additional approvals have forced us to abandon our plans in favor of the traditional direct list for April 2021.

The company now believes it could expand its products, suggesting that Haas could introduce internationally available products to the US market, which is already widely used by crypto traders around the world.

Security tokens that work like traditional securities, but traded on blockchain networks can provide investors with voting rights and profit sharing mechanisms, improving trading efficiency.

This new push follows previous regulatory challenges, including the SEC litigation against Coinbase. Coinbase accused the company of operating as an unregistered exchange, broker and clearing agency.

However, the SEC has officially demanded that the lawsuit be dismissed on bias. That is, it cannot be reconsidered, indicating a major shift in regulatory sentiment.

Coinbase CEO Brian Armstrong highlights the potential benefits of tokenized securities, saying it can provide consumers with 24-hour trading capabilities.

The company previously detailed its commitment to digital securities infrastructure in its 2020 S-1 filing and developed a blockchain token securities law framework for compliance purposes.

Armstrong is scheduled to take part in the first White House Script Summit with President Donald Trump on Friday, highlighting the growing dialogue between the crypto industry and policymakers.

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