Coinbase Launches Tokenized Stocks on Base | Jesse Pollak

Coinbase is launching tokenized stocks on Base, aiming to enhance global accessibility and tradability. These tokenized stocks will represent real stocks on a one-to-one basis, providing users with direct claims, governance rights, and dividends akin to traditional stocks. Initial offerings will include major companies like Nvidia, Meta, Apple, and Google, with plans to expand to thousands of stocks.

While US users will not be able to trade these tokenized stocks directly through the interface, they can access them freely on the blockchain. Coinbase's model for tokenized stocks diverges from traditional brokerage approaches, focusing on integrating all asset classes and positioning Base as a blockchain for global finance. The DeFi ecosystem on Base has experienced a growth of 30 to 40% during the bear market, making it the second largest on-chain ecosystem after Ethereum.

To enhance composability in DeFi, Coinbase has adopted a rebasing model for dividends, which is expected to improve liquidity through the introduction of tokenized stocks. Jesse Pollak anticipates significant adoption and innovation in this space, predicting that the ecosystem could grow to a valuation of 100 billion in the coming years. The competitive landscape for tokenized stocks is evolving, with no single product dominating, yet the acceleration of crypto tokenized stocks is democratizing access to equities for previously unbrokered individuals.

The rollout of tokenized stocks will initially target non-US customers, helping Coinbase attract new users by offering stocks at a low price point across various regions. Pollak notes that neobanks are transitioning into neobrokerages, integrating crypto as a financial rail, and he expects the term "neobrokerage" to gain traction by 2026. Compliance with financial regulations poses challenges for Coinbase, but the jurisdiction for these tokenized stocks is primarily outside the US, simplifying legal complexities.

Pollak emphasizes that building on a global financial system mitigates challenges compared to traditional systems, and the tokenized nature of the product will remain intact regardless of off-hours trading. He predicts that as liquidity deepens, price discovery will increasingly occur on-chain. Base is positioned well for trading, financing, and payments, with builders worldwide leveraging crypto and Base for innovation.

The introduction of tokenized stocks sets the stage for scalable blockchains and real-world assets, with Base now supporting 25 currencies for localized experiences and on-chain foreign exchange. Pollak highlights the current technological advancements and available assets as a unique opportunity within the crypto space. He stresses the need for the crypto ecosystem to develop infrastructure that supports all global currencies on-chain, noting that 22 to 23 currencies are currently available.

Pollak points out that the adoption of dollar stablecoins has been significantly driven by the development of decentralized finance infrastructure. Base hosts the largest on-chain foreign exchange markets, with a high demand for earn products, including approximately $200 million in non-dollar stablecoins. He predicts that the issuance of local stablecoins will create new financial product opportunities in various countries, while the lack of these stablecoins hampers monetization efforts outside the U.S.

Infrastructure for local currencies is gradually being developed, with notable adoption in regions like Europe, Brazil, and Nigeria. Pollak expresses skepticism about major lending protocols effectively creating lending markets for currencies such as the Naira, although he believes Nigeria will transition on-chain within the next decade. He sees a significant opportunity for builders to create lending solutions for the Naira, asserting that integrating crypto rails into local economies will enhance efficiency and connectivity to the global economy.

Pollak has transitioned the base app to Kobe to focus on expanding the chain, which he envisions as a blockchain for global finance. He notes that Base is designed to be fast and cost-effective for trading, financing, and payments, which are interconnected in Coinbase's vision of an "everything exchange." Coinbase aims to provide specialized infrastructure for tokenizing assets and trading, with plans to extend tokenized stock offerings beyond Base. While he acknowledges Ethereum's scaling potential, he refrains from disclosing specific timelines or other networks for tokenized stocks.