Coinbase this week launched conventional stock and ETF trading for all US customers, offering zero commission trades alongside crypto in a single app. It includes a Yahoo Finance marketing partnership and 24/5 trading hours. Fractional shares from $1 make the competitive target obvious: Robinhood. But buried in the announcement’s small print is a more consequential signal. “More information regarding tokenized equities will be available in the coming months. Coinbase does not intend tokenized equities to be a product of Coinbase Capital Markets Corp. or Coinbase, Inc.”
That is somewhat cryptic. The two entities explicitly excluded are the registered broker-dealer subsidiary through which the conventional stock trading operates, and the main parent operating company. If tokenized equities will be neither of those, the question becomes: what entity will deliver them and under what regulatory structure?
Ruling out the obvious routes
The conventional path to a tokenized securities trading venue in the US would run through the existing broker-dealer infrastructure. In fact another Coinbase entity, Coinbase Securities, had an alternative trading system (ATS) license, which lapsed in early 2024. The DTCC has recently signalled openness to tokenization, establishing that a DTCC-eligible security can soon be tokenized and that subsequent transfers of the tokenized version can then settle on-chain, outside DTCC’s normal settlement infrastructure.
But using Coinbase Capital Markets or Coinbase Securities for tokenized stocks would drag in Reg NMS obligations, including best execution requirements, order protection rules, and trade-through rules. Previously Coinbase has made clear in SEC submissions that it regards those requirements as ill-suited to blockchain-based trading environments. This suggestion attracted pushback from TradFi entities. By excluding Coinbase Capital Markets the exchange is deliberately closing this NMS door.
Another way of structuring tokenized stocks while sidestepping NMS requirements would be to adopt a path similar to Robinhood tokenized stocks that use an equity swaps structure. But this creates different problems. Single stock equity swaps are security based swaps under SEC jurisdiction, and can only be offered to Eligible Contract Participants, effectively ruling out retail entirely. Coinbase has separately announced plans for equity perpetuals as an offshore product, and these too will not be available to US persons.
An offshore structure for tokenized stocks more broadly is similarly unconvincing. Coinbase’s own annual report states that 84% of 2025 revenues came from the US. While it recently acquired Deribit which is not US-based, that makes strategic sense because crypto derivatives is a genuinely global, offshore-dominated market. Tokenized equities targeting retail is a different proposition given Coinbase’s predominantly domestic customer base. Offshore is not a meaningful escape valve here.
The regulatory opening: AMMs
The changed SEC posture under Chair Paul Atkins opens up another avenue. In recent public remarks, Atkins outlined the potential for trading tokenized securities on permissionless chains via DeFi automated market makers (AMMs), with exemptions from rules that don’t map onto how the technology actually works. This would not be a blanket exemption. Instead it would apply where issuers enable tokenization through specialist transfer agents, with the transfer agent whitelisting eligible token holders. Volume limits would apply and the exemption would be temporary.
Critically, this framework requires stock issuers to affirmatively opt in. That narrows the realistic initial universe considerably. The companies most motivated to enable tokenization of their own stock are those already operating in the digital asset space such as Coinbase, Circle, Galaxy, Strategy and their peers. This is not necessarily a weakness. A focused initial offering of crypto correlated equities actually complements the broad conventional stock trading just launched. The mainstream brokerage covers the market; the tokenized product serves a specific use case where the benefits are most acute as shown below.
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For most market participants, the whitelisting requirement is a meaningful operational constraint. For Coinbase it is almost trivially solved. The company already holds KYC data on its entire user base. Whitelisting verified Coinbase customers as eligible token holders is an administrative process rather than a structural barrier.
This points toward a potentially elegant structure. Base, the Coinbase founded Layer 2 blockchain, provides the settlement infrastructure. Aerodrome, the leading DEX on Base, could serve as the AMM liquidity mechanism. Critically, Coinbase does not own Aerodrome. It holds some tokens, but the protocol is independent. That distinction matters. Coinbase would not be operating the trading venue, which sidesteps the ATS question entirely. Its role would be tokenization facilitation, customer onboarding, possibly custody, and the whitelisting function, none of which require the product to sit within the broker-dealer or the parent company. The entity exclusion language starts to make structural sense.
What’s in it for US customers?
The benefits of tokenized over conventional stocks for domestic users are tangible. The mainstream offering just launched is 24/5, whereas tokenized stocks on-chain would be genuinely 24/7. That matters particularly for crypto adjacent equities because Coinbase, Strategy, Circle and their peers move in correlation with crypto markets that trade around the clock, and holders currently cannot react to weekend price movements.
Tokenized stocks would also function as native on-chain collateral, enabling DeFi lending and margin positions using equity holdings in ways that are operationally impossible with conventional shares. The announcement gestures at this directly by talking about the ability of tokenized stocks to “leverage your equity holdings as onchain collateral, and make instant payments backed by your stock value.” Settlement would be atomic rather than T+1. And once a stock is a token on Base, it becomes composable with the broader DeFi ecosystem including yield strategies, cross-collateralization with crypto holdings, and unified portfolio management in a genuinely functional sense.
Which Coinbase entity fits the bill?
One regulatory building block may be closer to visible than it first appears. The Atkins framework specifically contemplates specialist transfer agents as the gatekeepers for tokenization eligibility. Coinbase does not currently hold a transfer agent registration with the SEC. But that may not be where to look.
Banks operating under a national charter register as transfer agents with the Office of the Comptroller of the Currency rather than the SEC. Coinbase has applied for a national trust charter, through a proposed entity called Coinbase National Trust Company (CNTC). The public application reveals that CNTC is designed to provide qualified custodian services in a fiduciary capacity, and to enable clients to “interact with select smart contracts onchain.”
A nationally chartered trust bank with qualified custodian status and on-chain interaction capability would have the regulatory standing to perform the transfer agent whitelisting function the tokenized equities structure requires, and optionally the custody function for customers who prefer not to self custody, sitting cleanly outside both the broker-dealer and the parent operating company. Whether the confidential business plan submitted with the charter application contains more explicit detail about tokenized securities ambitions is unknown. But if the Coinbase entity for tokenized stocks won’t be Coinbase Inc or Capital Markets, then CNTC may be the subsidiary the language was pointing toward all along.
The conventional stock launch this week tells you that Coinbase Capital Markets is a broker-dealer competing for retail brokerage business in the existing market structure. The small print tells you that something else entirely is being designed alongside it. The logic of that structure, given the regulatory constraints and Coinbase’s existing infrastructure, points toward a Base-native, AMM-settled, transfer-agent-gated product oriented initially around crypto correlated equities.
But the specific exemptions that would enable it have not yet been confirmed by the SEC, and it is possible Coinbase has a different path in mind that the public record does not yet reveal. The architecture is taking shape. The entity that will sit at its center is yet to be confirmed.
