Base Considers Launching Tokenized Version of COIN Stock
In a recent post on the X platform, Jesse Pollak, developer of Coinbase’s Ethereum layer-2 network, Base, revealed that the company is considering making tokenized shares of its stock available to United States users of Base. This move would allow US users to participate in the growing trend of tokenization, which has already gained traction globally.
Tokenized COIN Shares Already Available to Non-US Users
As noted by Pollak, tokenized COIN shares are already accessible to non-US users through protocols such as Backed, a tokenized real-world assets (RWA) platform. This highlights the increasing adoption of tokenization, which has the potential to revolutionize the way securities are traded and held.
Coinbase’s Exploratory Phase
While Coinbase is exploring the possibility of making tokenized shares available on Base, Pollak emphasized that the company currently has "no concrete plans" in place. Instead, they are in an "exploratory phase," working to understand how to navigate US regulations and provide clarity for users.
Regulatory Clarity Needed
As highlighted by Colin Butler, Polygon’s global head of institutional capital, tokenized RWAs – including tokenized securities – represent a massive $30 trillion market opportunity globally. However, regulatory clarity is essential for widespread adoption in the United States.
Pollak reiterated this point, stating that "we need regulatory clarity and improvements that embrace onchain as an open platform to unlock this for everyone." This underscores the importance of clear regulations in enabling the growth of tokenization.
US Crypto Stocks Surge Following Trump’s Victory
The potential benefits of a more favorable regulatory environment were evident in November, when US crypto stocks such as COIN saw massive gains following Donald Trump’s victory in the presidential election. This surge was attributed to the expectation that the incoming administration would be more conducive to the growth and adoption of cryptocurrencies.
COIN Surges Past $300
On November 11, COIN surged over 20%, pushing the stock past $300 for the first time since 2021. This significant increase highlights the potential upside of tokenization, which enables greater accessibility and liquidity in the market.
Trump Administration: A Favorable Environment for Crypto
As noted by Michale Miller, an equities researcher at Morningstar, the Trump administration is expected to be more favorable to the cryptocurrency industry. This shift in regulatory environment is likely to benefit companies like Coinbase, which has been struggling with regulatory pressure from the SEC.
SEC Enforcement Actions: A Barrier to Adoption
Under President Joe Biden, the US Securities and Exchange Commission (SEC) has brought over 100 enforcement actions against cryptocurrency companies for purported violations of securities laws. While this indicates an attempt to provide clearer guidelines for the industry, analysts say that legislation in the United States is "lagging other major jurisdictions."
Legislative Reform: A Path Forward
As investment bank Citi noted in a December research note shared with Cointelegraph, the US has begun to move away from regulation by enforcement toward a broader framework passed by Congress. This shift towards more comprehensive legislation is essential for providing clarity and promoting adoption of tokenization.
Conclusion
Coinbase’s consideration of making tokenized shares available on Base highlights the growing trend of tokenization. As the industry continues to evolve, regulatory clarity will be crucial in unlocking the full potential of this innovative technology. With the incoming Trump administration expected to provide a more favorable environment for crypto adoption, the future looks promising for companies like Coinbase and the broader tokenization market.
Related Topics
- Tokenization can transform US markets if Trump clears the way: A previous article exploring the potential benefits of tokenization in the United States.
- Burgeoning Market: An overview of the growing trend of tokenized real-world assets (RWA) and its significant market opportunity.
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