Coinbase Considers Launching Tokenized COIN Shares on Base Amid Regulatory Uncertainty

Coinbase is exploring the possibility of launching tokenized shares of its stock, COIN, on its Ethereum layer-2 network, Base, for U.S. users, according to a post by Base developer Jesse Pollak on the X platform. This move would allow users to trade tokenized shares of Coinbase’s stock directly on the blockchain, marking a significant step toward the tokenization of traditional financial assets.

While tokenized COIN shares are already available to non-U.S. users through decentralized platforms like Backed, which specializes in tokenized real-world assets (RWAs), Pollak indicated that the tokenized version of COIN for U.S. users is still in the exploratory phase. "COIN on Base is something we are looking into in the new year," Pollak stated, adding that, eventually, "every asset in the world will be on Base."

However, Pollak clarified that Coinbase currently has no concrete plans to move forward with this initiative. The company is waiting for greater regulatory clarity surrounding securities tokenization in the U.S. before proceeding. “We need regulatory clarity and improvements that embrace on-chain as an open platform to unlock this for everyone,” Pollak explained. The company is closely monitoring how to navigate the regulatory landscape and its implications on the tokenization of assets.

Tokenized Securities Market Potential

The concept of tokenized real-world assets, including tokenized securities, has garnered significant attention in the crypto space due to its vast market potential. According to Colin Butler, Polygon’s global head of institutional capital, the total market opportunity for tokenized RWAs is estimated at $30 trillion globally.

In the past year, Coinbase’s stock has seen notable volatility. On November 11, the price of COIN surged by more than 20%, breaking past the $300 mark for the first time since 2021. Analysts suggest that Coinbase's stock performance could be influenced by broader political shifts, with some believing that regulatory pressures may ease with a more crypto-friendly administration.

Michael Miller, an equities researcher at Morningstar, noted that Coinbase is positioned to benefit from favorable policy changes, particularly with a potential shift toward less stringent regulation under a new U.S. administration. He pointed out that the company's staking business may face less regulatory pressure under a government that is more supportive of the cryptocurrency industry.

Regulatory Clarity: A Crucial Step for Crypto Adoption

As the cryptocurrency industry continues to grow, analysts emphasize that clearer U.S. regulations are critical for the wider adoption of tokenized securities like COIN. Over the past few years, the U.S. Securities and Exchange Commission (SEC) has been aggressive in its regulatory approach toward cryptocurrency companies, with more than 100 enforcement actions for alleged violations of securities laws under the current administration.

Investment bank Citi observed in a December research note that while the U.S. has started to move away from "regulation by enforcement" in favor of creating a broader regulatory framework, the legislation in the U.S. still lags behind other major jurisdictions. The absence of clear, comprehensive regulations has made it difficult for U.S. crypto firms to fully embrace the potential of tokenized securities.

Coinbase’s exploration of tokenized COIN shares on Base is part of a larger trend towards integrating traditional financial assets with blockchain technology. However, this ambition hinges on the resolution of regulatory uncertainties that could either unlock new opportunities or stifle growth in the sector.

Until regulatory clarity is achieved, Coinbase’s plans for tokenized shares will remain in the "exploratory phase," as the company continues to evaluate the best path forward.