Coinbase Considers Tokenizing COIN Shares on Ethereum Layer-2 Base
Coinbase is considering tokenizing its COIN shares on its Ethereum Layer-2 network, Base. This initiative aims to merge traditional stock markets with blockchain technology. Regulatory compliance remains a major challenge for this early-stage project.
Jesse Pollak, lead developer at Base, stated that Coinbase is navigating the regulatory landscape to facilitate legal tokenized asset offerings. Currently, tokenized COIN shares are accessible only to international users through decentralized platforms. Pollak noted that making these assets available to US users relies on clearer regulatory guidelines, which Coinbase is pursuing.
Pollak indicated that tokenized COIN stocks could be the initial step. Base has quickly reached over $3.84 billion in total value locked (TVL) and aims to manage $1 trillion in assets sooner than expected, positioning itself as a key player in decentralized finance.
Tokenization is increasingly prominent in the financial sector, with leaders like Bitwise CEO Hunter Horsley highlighting its potential to democratize capital markets. He noted that many smaller businesses are excluded from public equity markets due to high entry barriers, and tokenization could offer easier access to equity markets, fostering inclusivity.
This move aligns with Coinbase's status as the first publicly traded cryptocurrency exchange in the US, boasting a market capitalization of approximately $70 billion. The company actively defends the crypto industry's interests against regulatory challenges. Austin Campbell, an adjunct professor at Columbia Business School, commended Coinbase for its leadership in opposing excessive regulatory measures in the US.
Coinbase's exploration of tokenized COIN shares mirrors a broader trend of integrating blockchain technology with traditional financial systems. If regulatory clarity is achieved, this initiative could create new opportunities for Coinbase and set a benchmark for other financial institutions aiming to connect traditional markets with decentralized finance.
As discussions about tokenization advance, the industry expects progress in overcoming regulatory barriers. With clear guidelines, Coinbase’s vision for offering tokenized COIN shares in the US could materialize, leading to widespread adoption of blockchain-based financial systems.