Coinbase Tokenized Stocks & Bonds
The Blockchain Sector @ 2025-06-18
Paul Grewal, chief legal officer at Coinbase, recently disclosed to Reuters that they are in discussions with the SEC about tokenized equities and this was a huge priority for the exchange.
This follows Kraken’s announcement that they will be offering tokenized stocks to non-US customers.
While no timelines or technical details are in place it seems clear that we are moving towards a world where we can buy tokenized stocks & bonds on centralized exchanges.
This is a first step in the right direction, the end goal would be:
ERC20 or equivalent tokens across all major chains
Dividends distributed in stablecoins or used to increase stock position per token
24/7 trading on decentralized exchanges without KYC
Approved deposit assets for overcollateralized lending protocols and these digital assets integrated into the lego bricks of DeFi
In theory you could have a TESLA token on Base, bridge it to wherever, deposit a synthetic bridged token to AAVE, take out a loan in USDC and leverage up the equity position… or something less degen.
Demand for this product is going to open some eyes across traditional finance in the same way the Bitcoin ETF did when it became the fastest growing ETF ever launched.
Let’s look at some numbers to guesstimate potential TVL in decentralized equities.
US Currency in circulation - $2.4T
US Bond Market Market Cap - $46T
US Stock Market Market Cap - $52T
Stablecoin market cap - $250B
Given the ratios in traditional finance I’d expect demand for stocks and bonds to exceed stablecoin market cap significantly at some point in the future (years).
It’s worth noting that a lot of tradfi market cap is tied up with massive financial conglomerates like Blackrock, Vanguard etc. and they aren’t going to be moving their holdings to our favourite blockchains any time soon.
However if I could buy tokenized stocks I would. There is value in diversification for the big crypto native funds as well. There is probably money sitting on the sidelines that would find a home in a SP500 tracker.
It also opens up the possibility for a balanced portfolio of crypto/stocks/bonds which could become a 21st century staple like the 60/40 portfolio. The beauty of these types of portfolios is we can rebalance them at regular intervals which over enough time semi-automates the process of buying low and selling high.
Knock On Effects
There are knock on effects of this seismic shift in the industry.
The move could raise awareness and investment from tradfi for smart contract platforms. Sooner or later Wall street will become aware that Ethereum is nothing like Bitcoin (world computer - pure cryptocurrency)
DeFi could get a second wind of life with all the possibilities that stocks would open up. Derivatives like perps and options, leverage strategies using overcollateralized loans, yield on stables, index trackers, tokenized hedge funds.
If the tokens launch or eventually get bridged to Base (Coinbase’s own EVM blockchain) it could create a flow of attention to that chain as TVL swells.
Bad for brokers like Robinhood and Fidelity if retail investors can gamble on-chain.
Potential issues with KYC/AML if these products are standard tokens and don’t require regulatory control over who holds them. Upside of this is increased financial inclusion.
24/7 stock markets. Although prices may still be set on the NYSE during open hours. Outside of trading hours the token prices will act as a source of truth in the same way Polymarket did during the election.
No method to halt trading unless it’s coded into the contract. It will be difficult to balance the inherent centralization with the decentralized standards that crypto industry participants have come to expect.
Could we see a new wave of initial share offerings on-chain? Maybe something like AIM in the UK where tech stocks can launch with reduced requirements compared to the main LSE.
Real time transparency in to cap table changes, director dealings etc.
Good for COIN if they can get a foot in the door and become a significant stock broker, it creates new revenue streams. Potentially good for stablecoin issuers, particularly Circle if it injects life and TVL into DeFi.
DeFi governance tokens like UNI & AAVE could benefit from increased usage, fees and TVL.
A whole new sub-sector could spring into life as devs build infrastructure and derivatives around tokenized stocks and bonds. This will be the biggest opportunity for devs and investors/traders, in my opinion.
We wait, it’s what we do. Markets are ranging after a strong recovery from the move down to $74k in April. Expecting a summer lull to set in at some point but hopeful we will get a new all time high and one more big run up before the stagnation sets in.
September-October could be a critical time where we decide if we are going to break out and put in an exponential curve, or settle back down into a slow grind supercycle, or set everything on fire for another 4 years.
I’m hoping for a big blow off top, expectant of a slower grind up and terrified of another long brutal bear market.
The US stock market is still below ATH and there’s room for 10-15% growth there if Trump allows it. Given that I think it’s reasonable to hold with expectations of continued outperformance for digital assets. We wait, it’s what we do.
If markets move back down I don’t think there will be any panic selling unless Bitcoin get’s to a 50%+ drop. We’ve had a 30% drop in April so a second time around should see less forced or emotional selling, reducing the downside risk in my opinion.
Upside potential is still significant with Saylor and friends buying up all the Bitcoin, Stablecoins gaining some limelight and the potential for DeFi and altcoins to make a come back… one day, one day #hopium
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