- Coinbase CEO says tokenized equities will bring major positive change, with the U.S. leading in regulated crypto stocks.
- SEC guidance allows issuers and third parties to create onchain securities while keeping investor rights protected.
- Third-party tokenized stocks can be custodial or synthetic, but risks and rights vary, requiring careful compliance.
A major shift in U.S. financial markets is unfolding as tokenized equities move closer to regulated reality. Coinbase CEO Brian Armstrong says the change will arrive “very soon,” with the U.S. leading globally. Consequently, regulators, exchanges, and investors now prepare for onchain stocks under clear federal oversight.
Tokenized equities refer to traditional securities issued or represented through blockchain networks. According to the U.S. Securities and Exchange Commission, ownership records can now live partly or fully onchain. Hence, transfers can occur through crypto networks while still complying with securities laws. Armstrong emphasized stating, “Yep Tokenized equities are going to make a major positive change to the financial system.”
The SEC reinforced this momentum on January 28, 2026. Its policy divisions jointly released a detailed statement clarifying how federal securities laws apply. Moreover, the guidance explained how issuers and third parties can tokenize stocks, bonds, or derivatives without legal ambiguity.
How Issuers Can Tokenize Securities
Issuer-sponsored tokenization allows companies to issue securities directly as crypto assets. The blockchain then acts as the shareholder ledger. However, the SEC stressed that legal obligations remain unchanged. Registration rules still apply, regardless of format.
Additionally, issuers may offer both traditional and tokenized versions of the same security. They may also allow conversion between formats. Hence, tokenization affects recordkeeping efficiency, not investor rights. Paul Grewal, Coinbase’s Chief Legal Officer, said, “It’s happening,” while praising the SEC’s forward-looking stance.
Third-Party Tokenization Models Explained
Third parties can also tokenize existing securities without issuer involvement. However, these structures vary widely in risk and rights. One model uses custodial tokenized securities. Here, a firm holds real shares and issues onchain entitlements.
Another model creates synthetic exposure. These linked securities or security-based swaps mirror stock prices without ownership rights. Consequently, investors face counterparty and bankruptcy risks. The SEC clearly differentiated these instruments to prevent confusion.
Moreover, the regulator emphasized that economic reality matters more than labels. Hence, compliance depends on how the product behaves, not how firms market it.
This clarity supports regulated innovation while protecting investors. It also positions the U.S. as a competitive hub for financial tokenization. As Grewal noted, regulators now understand the stakes for U.S. competitiveness.
