The U.S. Securities and Exchange Commission (SEC) has introduced an innovative exemption system for trading tokenized stocks, positioning companies like Coinbase, Robinhood, and Circle as potential major beneficiaries.
On September 20, analysts from Goldman Sachs Group, Inc. and Citizens projected that Coinbase, Robinhood, and Circle are likely to benefit from the SEC’s innovation exemption for tokenized stocks, which could lead to an expansion of the on-chain securities market.
The SEC’s five-year innovation exemption aims to enable trading of tokenized U.S. stocks through automated market makers (AMMs) on public blockchains. To qualify, token holders must be granted rights similar to traditional shareholders, including dividends and voting privileges. Trading platforms will face certain restrictions on trading volume and the number of assets they can handle.
Goldman Sachs Group, Inc. analysts suggest that Coinbase could benefit across multiple business sectors. They note that Coinbase’s existing tokenized stock offerings already meet many of the SEC’s requirements, such as providing dividend-like benefits similar to underlying stocks.
Coinbase Chief Executive Officer (CEO) Brian Armstrong recently announced plans to introduce voting rights for token holders. The company also operates a custody service for institutions and the Coinbase Tokenize project, which supports asset tokenization for businesses.
Citizens analysts also highlighted Coinbase’s strong foundation in on-chain finance, citing its custody services, tokenized assets, stablecoins, and the Ethereum Layer 2 network Base.
However, experts predict that Coinbase will need to develop additional infrastructure to operate a trading platform under the innovation exemption. This is because Coinbase’s current exchange uses a central limit order book (CLOB) model, while the SEC’s exemption is based on AMM trading.
Robinhood is also seen as a potential beneficiary of the expanding tokenized stock market. However, its current stock tokens offered outside the U.S. function as derivatives tracking price fluctuations of underlying stocks, falling short of the SEC’s requirements for complete shareholder rights.
As a result, Robinhood is expected to develop new products to leverage the innovation exemption in the U.S. market. CEO Vlad Tenev recently announced plans to introduce additional shareholder features for their stock tokens, including stock redemption and voting rights.
Circle, the stablecoin issuer, is anticipated to benefit indirectly from the on-chain securities market expansion. Analysts from Goldman Sachs Group, Inc. and Citizens predict that as tokenized securities trading grows, demand for USDC could increase due to its use in payments and collateral for on-chain financial activities.
In contrast, traditional exchanges like Intercontinental Exchange (ICE), which operates NASDAQ and the New York Stock Exchange (NYSE), are expected to see limited short-term impact. Analysts suggest that tokenized stock trading is unlikely to rapidly erode existing exchanges’ trading volumes due to factors such as trading volume caps, issuer participation rights, and inherent limitations of AMM structures in large markets.
