Original author: Alex Xu (X: @xuxiaopengmint)
Narrative background
Just a few days ago, Coinbase CEO Brian Armstrong and CFO Alesia Haas both stated that they are considering tokenizing Coinbase's stock to enable trading of US stocks on the Base blockchain.
In this monotonous crypto cycle with PVP as the main line, we finally see the dawn of some interesting things.
If the progress goes smoothly, US stocks will become the third major RWA asset after stablecoins (USDT, USDC) and government bonds (Buidl). If the regulatory and compliance framework is clear and provides sufficient freedom for US stock tokens, US stock tokenization assets should have the hope of surpassing the current scale of government bond tokenization in the short term, as they offer the high volatility and speculative nature that crypto users prefer.
Business logic
Compared to the narratives that have emerged in this cycle, such as Crypto AI agents and desci (decentralized research), the value proposition of on-chain US stocks is clear, and the demand and supply sides are very clear:
The value proposition of US stocks going on-chain is similar to other DeFi products, reflected in a larger free market and superior composability:
1. Expanding the scale of the trading market: Providing a 7 × 24 hour, borderless, permissionless trading venue for US stocks, which is something the Nasdaq and NYSE currently cannot do (although the Nasdaq has already applied for 24-hour trading, but it is expected to be realized until the second half of 2026).
2. Superior composability: By combining with other existing DeFi infrastructure, US stock assets can be used as collateral, margin, to construct index and fund products, and derive many unimaginable use cases.
The demand and supply sides are also very clear:
Supply side (US-listed companies): Reaching potential investors from around the world through the borderless blockchain platform, gaining more potential buyers.
Demand side (investors): Many investors who were previously unable to trade US stocks directly for various reasons can now directly allocate and speculate on US stock assets through the blockchain.
In fact, the idea of US stocks going on-chain has been tried before, such as Coinbase's attempt to list its stock token ($COIN) as a security token in 2020, but it was shelved due to regulatory barriers from the US SEC.
In the previous DeFi boom, we also saw synthetic US stock assets in products like Terra's Mirror and Ethereum's Synthetix, but they gradually faded due to the regulatory threat from the SEC.
Even earlier, the security token issuance project Polymath, founded and funded in 2017, had promoted the concept of STO (Security Token Offering), where companies issue tokens representing securities rights through blockchain technology, and investors obtain rights similar to traditional financial instruments such as stocks and bonds (such as dividends and voting rights), which had once gained considerable market attention.
Now, the main driving force behind the resurgence of the STO concept and the feasibility of US stocks going on-chain is the substantive shift in attitude of the post-election SEC, from past strong regulatory confrontation to supporting innovation within the compliance framework.
Within the foreseeable future, STO may be one of the few crypto business narratives in this cycle that has a significant impact, a sound business logic, and a relatively high ceiling.
Related targets
Based on the background and logic of the narrative, we can review the relevant targets in the crypto secondary market.
In fact, there are not many well-established STO concept projects that have already issued tokens and gone online.
The most relevant one is likely Polymath, which was founded in 2017 and was one of the earliest to provide STO concept education in the crypto industry. It later launched the Polymesh blockchain, a public permissioned blockchain specifically designed for compliant assets (such as security tokens), with built-in identity authentication, compliance checks, privacy protection, governance, and instant settlement functions.
Polymesh has a good reputation in the industry, with BlackRock issuing a $500 million digital bond on Polymesh last November, and real estate giant CBRE also issuing property tokenization on it.
Polymesh's token, Polyx, has been listed on Binance, with a current MC and FDV both over $100 million, but a relatively low market capitalization.
In addition, RWA concept projects like Ondo, although they have mainly focused on the tokenization of government bonds in the past, their products can also be adjusted according to compliance regulations to serve the tokenization of stocks. Moreover, Ondo is closely associated with the Trump family and may receive more overt or covert conveniences, or even endorsement from Trump family members (although the marginal impact of such actions is becoming weaker).
Chainlink has also done a lot of work in connecting traditional financial institutions and blockchains, and as a mainstream oracle solution and security token service provider, it should also benefit from this.
Risks to be aware of
The reason the title of this article uses the phrase "hidden but not yet revealed" to describe this wave of STO narratives is that there are still many uncertainties about whether it can take off. Although the new SEC team's actions (withdrawing a large number of crypto lawsuits) suggest a more relaxed attitude towards STO, it is still unknown when the clear compliance framework for guiding STO will be introduced, which determines the speed at which companies like Coinbase can follow up and push forward.
The latest observation event is the SEC Crypto Working Group's first roundtable on March 21, the purpose of which is to provide a clear regulatory framework. One of the agenda items is the design of the compliance path, and one of the keynote speakers is Paul Grewal, the Chief Legal Officer of Coinbase, a key player in this STO narrative.
If the release of the STO-related compliance framework is slow, and the waiting time is too long, the current undercurrent narrative may be delayed or even extinguished.
Disclaimer: The information shared in this channel, as well as the author's comments on the information, may contain factual and opinion errors, and are for reference only. Welcome to discuss and correct through comments.
