Coinbase Tokenized Securities Approval: U-Turn or Just a Matter of Time?

Just days after claiming it had received authorization to list security tokens on its exchange, Coinbase has confirmed it had not had express permission to do so by the U.S. Securities and Exchange Commission.

Coinbase is understood to have been given the go ahead by the SEC and the Financial Industry Regulatory Authority to buy out Keystone Capital Corporation, an equity and securities brokerage.

According to a post on Coinbase's blog on June 6 by chief operating officer Asiff Hirji, the acquisition of these companies should pave the way for Coinbase's listing of tokenized securities.

The debacle shines a light on what seems to be a progression toward the listing of tokenized securities on cryptocurrency exchanges in America.

"Tokenized securities have a different risk/return profile, and are ultimately different than the rest of the crypto industry. One of the key differences is that the tokenized securities are likely to be redeemable as equity, debt or cash flows. As more investor interest flocks to this new space, there should be spillover interest into the more traditional crypto markets as well. This is not a binary world and it will be likely that Bitcoin, crypto, and tokenized securities all coexist successfully."

Steinbeck believes that it is only a matter of time until Coinbase gets the go ahead to list those tokenized securities.

"I fully expect Coinbase to get approval to engage in broker dealer activities, including the sale of security tokens. Coinbase has positioned itself as the leading regulatory-compliant exchange in the U.S.".

In due time, we could very well see a number of cryptocurrency exchanges offering new tokenized securities on their platforms.

"Tokenized securities are held to the same regulatory and legal standards as traditional securities. Exchanges, whether centralized or decentralized, will have to spend considerable time and energy to ensure they are compliant. These additional requirements should be seen as a positive, because - ultimately - they are a sign of market maturation."

With all things considered, it seems likely that more exchanges will follow in the footsteps of Coinbase and tick the right boxes to list tokenized securities lawfully.