What makes equities or stocks different from cryptocurrencies is their traditional way of trading, in contrast to blockchain-based digital asset trading. But what if trading equities on blockchain becomes a reality? Crypto exchange Kraken, in partnership with Solana and Backed Finance, has recently introduced an equity trading feature with xStocks, providing tokenized equities on the Solana blockchain in the US.
And now, crypto exchange Coinbase is looking ahead to start tokenized equity, and Solana joined Global Markets Alliance, a new initiative by Ondo Finance to “standardize and scale tokenized capital markets onchain.”
Coinbase seeks SEC approval to offer tokenized equities
Coinbase is taking a transformative move by seeking approval from the US Securities and Exchange Commission (SEC) to launch tokenized equities or blockchain-based stock trading. If the SEC approves the request, Coinbase will expand its services to customers by offering stock trading on blockchain.
Following this move, Paul Grewal, Chief Legal Officer of Coinbase, referred to this development as a “huge opportunity,” as the company has more potential to establish itself in the US crypto market.
What are tokenized equities?
A blockchain-based stock trading includes tokenized equities that are digital representations of traditional stocks issued and traded on a blockchain. These tokens allow you to have ownership of a real-world stock, just like how you own shares of a stock and partially own a company.
In short, the tokenized stocks are backed by actual shares and can be traded on crypto exchanges or decentralized platforms. Transactions of tokenized equities are much faster, clearer, and provide a 24/7 trading option.
What’s up with Solana?
Solana Foundation, the company behind the Solana cryptocurrency, is not an exception from this trend. The blockchain company announced that it has joined the Global Market Alliance of Ondo Finance to integrate traditional financial assets into blockchain.
Besides Solana, Ondo Finance has added several other wallets, custodians, and exchanges to the alliance, such as Bitget Wallet, Trust Wallet, Rainbow Wallet, Alpaca, 1inch, Fireblocks, BitGo, and Jupiter.
Coinbase and Solana’s ambitious goals to integrate stocks into blockchain come at a time when real-world tokenization is growing exponentially. Although tokenized equities promise benefits, they pose liquidity and regulatory challenges, according to the World Economic Forum (WEF).
