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 theme, 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:
1. Expanded trading market scale: Providing a 7 × 24 hour, borderless, permissionless trading venue for US stocks, which is something the Nasdaq and NYSE cannot currently do (although the Nasdaq has already applied for 24-hour trading, but it is estimated 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 from both the supply and demand sides is 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 on-chain US stocks has been tried before, such as Coinbase's attempt to list its stock token ($COIN) 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 on Terra's Mirror, Ethereum's Synthetix, and others, 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 also gained considerable market attention at the time.
Now, the main driving force behind the resurgence of the STO concept and the feasibility of on-chain US stocks is the substantive shift in the SEC's attitude after the change of administration, from past strong regulatory opposition 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 sort out 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 designed for compliant assets (such as security tokens), with built-in identity authentication, compliance checks, privacy protection, governance, and instant settlement.
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 tokenized real estate shares based on it.
Polymesh's token, Polyx, has already been listed on Binance, with a current MC and FDV both over $100 million, but a relatively low market cap.
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 endorsements 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 released, which determines the speed at which Coinbase and others will follow up and push forward.
The most recent observation event was the SEC Crypto Working Group's first roundtable on March 21, where the agenda included "Defining the Status of Securities: History and Future Pathways", including the design of compliance paths.
More notably, one of the speakers at this roundtable was 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 of the narrative may be delayed or even extinguished.
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