Coinbase is investigating the potential to offer tokenized shares of its stock, COIN, to U.S. users through Base, its Ethereum layer-2 network. This initiative reflects the company’s broader goal of integrating traditional financial assets into blockchain technology.
Announcement Sparks Interest in Tokenized Shares
Jesse Pollak, a Base developer, revealed the news on January 3 via a post on the X platform. He clarified that the project remains in the exploratory stage.
Currently, tokenized COIN shares are accessible to non-U.S. users through platforms like Backed, a protocol specializing in tokenized real-world assets (RWAs).
Aligning with Coinbase’s Future Vision
Pollak suggested that offering COIN on Base aligns with Coinbase’s aspiration for a future where “every asset in the world will be on Base.” Despite this vision, he emphasized the necessity for regulatory clarity in the U.S.
“We need regulatory clarity and improvements that embrace on-chain as an open platform to unlock this for everyone,” Pollak stated.
Growing Market Potential for Tokenized Assets
The global market for tokenized RWAs, including securities, is valued at $30 trillion, as per Colin Butler, Polygon’s global head of institutional capital. Tokenization is gaining momentum as a means of bridging traditional finance and blockchain technology.
Regulatory Challenges Amidst Rising Interest
Although tokenization holds promise, regulatory uncertainties remain a significant obstacle. The U.S. Securities and Exchange Commission (SEC) has taken over 100 enforcement actions against crypto firms under President Joe Biden’s administration.
Despite these challenges, Citi’s December research note highlighted progress toward a broader legislative framework, though U.S. regulations still lag behind those of other major jurisdictions.
Tokenization Market’s Forecasted Growth
Recent reports project substantial growth in the tokenization market:
- McKinsey & Company predicts the tokenized financial assets market could grow to $2 trillion by 2030, despite a slow start.
- GFMA and Boston Consulting Group estimate the global value of tokenized illiquid assets may reach $16 trillion by 2030.
- Citigroup offers a conservative estimate of $4 trillion to $5 trillion worth of tokenized digital securities by the same year.
Major Players Driving Tokenization
Recognizing the potential, leading companies are expanding in the tokenization space. For example, Goldman Sachs plans to launch three new tokenization products this year in response to rising client interest.
Digital carbon market platforms like Toucan and KlimaDAO, along with real estate tokenization protocol Propy, are also seeing significant user growth, highlighting the increasing adoption of tokenized assets across both public and private blockchains.
Conclusion: A Visionary Yet Challenging Path
While Coinbase’s exploration of tokenized COIN shares showcases a forward-thinking approach, the journey toward implementation hinges on overcoming regulatory hurdles. However, the growing market potential indicates a promising future for asset tokenization within the blockchain ecosystem.
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