Major cryptocurrency exchanges are reportedly positioning to bring tokenized stock trading onto the blockchain, signaling a renewed push to merge traditional financial markets with digital assets.
According to a report published Friday by The Information, platforms such as Binance are exploring ways to offer crypto tokens that track publicly listed US companies, effectively creating new channels for equity exposure through tokenized instruments.
Binance And OKX Explore Tokenized Stocks
The report says Binance is considering reintroducing stock tokens to its platform, several years after pulling similar products in 2021 amid regulatory uncertainty.
The plan, cited by a person familiar with the matter, reflects a broader shift within the industry as exchanges revisit tokenized equities under evolving market and compliance frameworks.
OKX is also said to be evaluating the possibility of offering tokenized stocks, according to Haider Rafique, the company’s global managing partner and chief marketing officer.
Binance has framed the move as part of its long-term strategy to connect traditional finance with the crypto ecosystem. In a statement to CoinDesk, a Binance spokesperson said the exchange is focused on expanding user choice while maintaining strict regulatory standards.
The company noted that it began supporting tokenized real-world assets (RWAs) last year and recently launched what it described as the first regulated traditional finance perpetual contracts settled in stablecoins.
Exploring tokenized equities, the spokesperson said, is a natural progression as Binance continues to build infrastructure, collaborate with established financial institutions, and develop new products for users and the wider industry.
Binance and OKX are not alone in this effort. Several major crypto firms, including Robinhood (HOOD), Gemini (GEMI), and Kraken, have already rolled out tokenized stock offerings in Europe. Meanwhile, Robinhood and blockchain startup Dinari are seeking regulatory approval to introduce similar products in the United States.
Tokenized Shares Gain Increased Interest
Robinhood took a significant step in June of last year when it launched trading in tokens linked to publicly listed companies and announced plans to expand into tokenized shares of private firms.
As part of the rollout, the company distributed tokens pegged to OpenAI. According to Robinhood’s terms and conditions, those tokens function as derivative contracts backed by the firm’s ownership of fund units in a special-purpose vehicle that holds OpenAI convertible notes.
Coinbase (COIN), on the other hand, is reportedly in discussions with the US Securities and Exchange Commission (SEC) about launching tokenized securities that would grant investors the same legal rights and benefits as conventional shares.
Several issuers involved in the space say they are closely adhering to established rules around securities law, anti-money laundering requirements, bankruptcy protections, and investor safeguards.
Industry leaders argue that, when structured properly, tokenization can strengthen rather than weaken investor protections. Ian De Bode, chief strategy officer at Ondo Finance, said that a careful approach to tokenized securities can enhance safeguards while unlocking efficiencies that traditional markets struggle to achieve.
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The crypto industry is preparing for a potential security challenge with the anticipated arrival of quantum computing. In response to this potential threat, Coinbase (COIN) has announced the formation of an advisory board composed of external experts.
Coinbase Chief Security Officer’s Warning
According to a report from Fortune, the newly established board includes academics from Stanford, Harvard, and the University of California, specializing in fields like computer science, cryptography, and fintech.
Officially titled the Coinbase Independent Advisory Board on Quantum Computing and Blockchain, the group also features experts from the Ethereum Foundation, the decentralized finance (DeFi) platform EigenLayer, and Coinbase itself.
Jeff Lunglhofer, Coinbase’s Chief Information Security Officer, elaborated on the potential impact of quantum computing on current encryption methods.
He explained that the encryption protecting wallets and private keys of Bitcoin (BTC) holders relies on complex mathematical problems that would take conventional computers thousands of years to solve.
However, with the computational power that quantum computers promise—potentially a million times greater—these problems could be solved much more swiftly, Lunglhofer asserted.
Although the security implications of quantum computing are genuine, Lunglhofer reassured that they are not expected to become an immediate concern for at least a decade. The purpose of the new advisory board is to examine the upcoming challenges posed by quantum computing in a measured manner.
This involves fostering initiatives within the blockchain industry that are reportedly already underway to enhance the resilience of Bitcoin and other networks against quantum attacks.
Blockchain Networks Expected To Implement Larger Keys
At present, Bitcoin secures its wallets through private keys, which consist of long strings of random characters. These keys are accessible to their owners but can only be estimated through extensive trial-and-error computations.
The advent of quantum computing, however, would make it feasible to deduce private keys using trial-and-error methods in a fraction of the time.
In response to this looming threat, Fortune disclosed that blockchain experts speculate that networks will implement larger keys and add “noise” to obscure their locations, making them more difficult to detect. Implementing these defensive upgrades across blockchain networks is said to take several years.
In the meantime, the newly formed Coinbase Advisory Board is gearing up to publish research papers and issue position statements aimed at helping the cryptocurrency industry brace for the impacts of quantum computing.
Their first paper, which will address quantum’s influence on the consensus and transaction layers of blockchain, is expected to be released within the next couple of months.
At the time of writing, Coinbase’s stock, which trades under the ticker symbol COIN on the Nasdaq, is trading at $225.10. This represents a slight drop of 1.2% over the last 24 hours.
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Following the unsuccessful markup of the long-awaited crypto market Structure bill (CLARITY Act) by the Senate Banking Committee, the Senate Agriculture Committee unveiled a new draft of the bill, with a scheduled markup session for Tuesday, January 27.
Stablecoin Yield Regulations Excluded
The Agriculture Committee’s version of the bill primarily addresses regulations under the Commodity Futures Trading Commission (CFTC), which would gain expanded authority to regulate cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).
In contrast, the Senate Banking Committee’s section of the legislation focuses on the Securities and Exchange Commission (SEC) and its oversight. Notably, the Agriculture draft allocates $150 million to support the CFTC in the implementation of the proposed law.
Market expert James Murphy reviewed the key provisions of the new draft and expressed optimism about its implications. He highlighted that the bill creates a pathway for decentralized finance (DeFi) to avoid CFTC regulation, providing important protections for developers and specific service providers from liability.
The Senate Agriculture Committee’s draft also excludes any regulations concerning stablecoin yields. This decision is significant, particularly as it addresses a critical provision that resulted in Coinbase (COIN) withdrawing its support for the Banking Committee’s version of the bill last week.
The Banking Committee’s version of the CLARITY Act aims to limit the yield that stablecoin platforms can offer. While banks support this approach due to concerns about deposits potentially flowing out, crypto firms oppose it, arguing that such restrictions hinder competition.
In contrast, the Agriculture Committee bill seeks to exempt stablecoins from CFTC regulations and relies on existing frameworks like the already passed stablecoin bill, or GENIUS Act, which mandates that stablecoins be fully backed.
Senate Agriculture Chair John Boozman expressed appreciation for the collaborative efforts among lawmakers, particularly mentioning Senator Cory Booker and his staff for their contributions to consumer protections and CFTC authority.
Despite the remaining differences in fundamental policy issues with its Democratic counterpart, the Committee’s chair emphasized the importance of moving the bill forward:
While it’s unfortunate that we couldn’t reach an agreement, I am grateful for the collaboration that has made this legislation better. It’s time we move this bill, and I look forward to the markup next week.
But amid the broader cryptocurrency industry’s optimism surrounding the Agriculture Committee’s version of the market structure bill, the timeline for advancing the overall legislation remains uncertain.
Bloomberg reported that the Senate Banking Committee is expected to delay consideration of its own portion of the bill, which could push discussions into late February or even March.
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At the World Economic Forum in Davos, Switzerland, Hong Kong’s Financial Secretary, Paul Chan Mo-po, announced the region’s plan to issue licenses for stablecoin providers in the first quarter of this year as the city seeks to strengthen its position as a leading hub for financial technology.
Hong Kong’s Regulatory Framework
Chan highlighted Hong Kong’s regulatory framework for digital assets, describing it as “responsible and sustainable.” He emphasized the importance of a balanced approach to support the growth of both finance and technology, noting that these two sectors are “mutually reinforcing.”
Chan articulated the benefits of digital assets, pointing out that they can enhance transparency, improve risk management, and facilitate more efficient capital movement. “We view digital assets as a financial innovation that we should embrace proactively,” he stated.
The Finance chief elaborated on the necessity of ensuring that digital assets serve the real economy while simultaneously implementing strong guardrails to mitigate risks related to financial stability, market integrity, and investor protection.
He reiterated the principle of “same activity, same risk, same regulation,” which is designed to promote a healthy, responsible, and sustainable environment for digital asset development. The government and regulators, he asserted, will act as “market enablers,” setting a precedent for innovation.
First Stablecoin Licenses Soon
Over the past couple of yeaers, Hong Kong has prioritized strengthening its position as a fintech hub, particularly in light of the US’s efforts to fulfill President Donald Trump’s vision of establishing the country as the global centre for crypto.
Chan pointed out that since 2023, the city has issued three batches of tokenized green bonds totaling $2.1 billion. Additionally, Hong Kong has already established a licensing framework for virtual asset trading platforms.
Notably, last November, the Hong Kong Monetary Authority (HKMA) launched a controlled pilot program to facilitate real-value transactions using tokenized deposits and digital assets.
During his remarks, Chan specifically mentioned the upcoming licensing regime for stablecoins, indicating that the first batch of licenses is expected to be issued soon.
According to reports from the HKMA, the authority received formal stablecoin license applications from 36 institutions by September 30, nearly half of the 77 expressions of interest recorded in August.
Applicants for these licenses include a diverse range of entities, such as banks, technology firms, securities and asset management companies, e-commerce platforms, payment service providers, and Web3 startups.
A spokesperson for the HKMA stated that the authority will review all submission materials meticulously and conduct approvals in line with the new Stablecoin Ordinance and relevant regulatory requirements.
While the HKMA aims to announce the first batch of licensed stablecoin issuers between the first and second quarter, it has advised that the licensing process will be stringent, with only a limited number of licenses granted during this initial phase.
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On Monday, Coinbase (COIN) announced a new partnership with Circle (CRLC), the issuer of the USDC stablecoin, to create what they claim to be “the world’s first fully on-chain national economy” in Bermuda.
Coinbase, Circle To Build New Digital Asset Infrastructure
Under this initiative, Coinbase and Circle are set to provide digital asset infrastructure and enterprise tools to various stakeholders, including the Bermuda government, local banks, insurers, and small and medium-sized enterprises.
Bermuda’s Premier, E. David Burt, commented on the initiative, stating, “This initiative is about creating opportunity, lowering costs, and ensuring Bermudians benefit from the future of finance.”
Government agencies are expected to begin piloting payments using stablecoins such as Circle’s USDC, while financial institutions are set to adopt tokenization tools. Residents will also have the opportunity to engage in nationwide digital literacy programs that foster understanding of the emerging financial landscape.
The announcement highlighted that transitioning to an on-chain economy is anticipated to include reduced transaction costs and improved access to global finance, facilitated by modern digital wallets and infrastructure with Coinbase and Circle’s support.
Bermuda’s Crypto Landscape
Bermuda has positioned itself as a leader in the digital asset space, having established its own regulatory framework for digital assets as early as 2018. This approach has attracted numerous companies looking for regulatory clarity amid tightening regulations in other regions.
The country’s regulatory framework currently supports a diverse range of regulated digital asset activities. The Bermuda Monetary Authority (BMA) is responsible for licensing crypto exchanges, yield-bearing stablecoin structures, and decentralized finance protocols under a cohesive supervisory regime.
This structure enables tokenized money market funds to operate within the jurisdiction, and even allows digital-native insurers to manage reserves, collect premiums, and process claims using cryptocurrency, all while adhering to traditional financial oversight.
Bermuda’s focus on digital finance has generated significant business interest. Notably, in late 2024, the BMA issued the world’s first license to a decentralized derivatives exchange governed by a Decentralized Autonomous Organization (DAO).
The jurisdiction also accommodates regulated derivatives operations linked to major exchanges, including Coinbase and Kraken, showcasing ongoing institutional confidence in its clear regulatory framework.
Furthermore, Bermuda has attracted utility-driven firms like Haycen, which utilizes specialized stablecoins to offer faster trade financing, effectively bridging gaps often encountered by conventional banks.
In addressing the risks associated with digital finance, Premier Burt acknowledged that no financial system can be fully insulated from risk. “In life, you can’t insure anything,” he stated in an interview.
He emphasized the importance of policymakers balancing caution with humility, allowing room for innovation while maintaining a robust regulatory environment in this still-evolving sector.
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On Monday, the New York Stock Exchange (NYSE) unveiled its latest plan to develop a tokenized securities platform, utilizing blockchain technology to facilitate 24/7 stock trading, now seeking regulatory approval.
New Digital Trading Venue At NYSE
According to Monday’s announcement, the proposed digital platform will offer a tokenized trading experience that includes around-the-clock operations, instant settlements, dollar-sized orders, and stablecoin (dollar-pegged cryptocurrencies) funding options.
By integrating the NYSE’s “advanced Pillar matching engine” with blockchain-based post-trade systems, the firm disclosed that the new platform will support multiple chains for settlement and custody, streamlining the trading process significantly.
Once regulatory approvals are secured, this platform will reportedly create a new venue at the NYSE for trading tokenized shares. These shares will not only be fungible with traditional securities but will also comprise tokens that are issued natively as digital assets.
Interestingly, tokenized shareholders will retain their rights, including eligibility for dividends and participation in company governance, much like traditional shareholders. The trading venue aims to align with established market structure principles and will provide non-discriminatory access to all qualified broker-dealers.
The launch of this tokenized securities platform is part of the Intercontinental Exchange’s (ICE) broader digital strategy, which includes preparing its clearing infrastructure for continuous trading and potentially integrating tokenized collateral.
Competition Heats Up
ICE is collaborating with major financial institutions like BNY Mellon and Citigroup to facilitate tokenized deposits across its clearinghouses. This effort will help clearing members manage funds and fulfill margin requirements outside of regular banking hours.
Lynn Martin, President of NYSE Group, emphasized the significance and innovation surrounding this development, stating:
For more than two centuries, the NYSE has transformed the way markets operate. We are leading the industry toward fully on-chain solutions grounded in unmatched protections and high regulatory standards.
The company’s President further stated that the New York Stock Exchange aims to combine trust with “state-of-the-art technology,” effectively reinventing market infrastructure to meet the evolving demands of a digital future.
Michael Blaugrund, Vice President of Strategic Initiatives at the Intercontinental Exchange, echoed Martin’s sentiment, noting:
Since its founding, ICE has propelled markets from analog to digital. Supporting tokenized securities is a pivotal step in our strategy to operate on-chain market infrastructure for trading, settlement, custody, and capital formation in the new era of global finance.
In parallel to these developments, the NYSE’s main competitor, Nasdaq, along with the CME Group, has intensified efforts to provide institutional investors with a regulated mechanism to measure cryptocurrency markets.
They recently reintroduced the Nasdaq Crypto Index, renamed as the Nasdaq-CME Crypto Index (NCI), designed to support products such as exchange-traded funds (ETFs) and structured funds. This move aims to establish clearer rules and governance for index-based cryptocurrency exposure.
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On Thursday, a new legislation was proposed in New York that aims to impose additional regulations on digital asset firms. The proposed law, known as the “CRYPTO” Act—short for “Cryptocurrency Regulation Yields Protections, Trust, and Oversight”—would make it illegal for digital asset firms to operate without the necessary licenses.
The announcement came from Manhattan District Attorney (DA) Alvin L. Bragg, Jr., and New York State Senator Zellnor Myrie, who emphasized the urgency of regulating the cryptocurrency marketplace in the State.
NY’s Proposed Crypto Bill
According to the duo’s press statement, organizations that exchange, trade, or transport cryptocurrencies in New York are required to register for a virtual currency license. Failure to do so has resulted in merely civil sanctions.
In contrast, the proposed CRYPTO Act would introduce criminal penalties for operating without a license, bringing New York’s regulatory framework closer to that of the federal system, where unauthorized conduct can result in up to five years in prison.
The new Act aims to ensure that digital asset businesses adhere to the same levels of diligence and transparency as traditional money transmitters.
Under the new legislation, unlicensed operations would fall under the category of Unlicensed Virtual Currency Business Activity, leading to a series of graduated penalties based on the value of the transactions involved.
Offenders could face charges ranging from a Class A misdemeanor to a Class C felony for activities involving $1 million or more within a year, potentially resulting in sentences of 5 to 15 years in state prison.
A “Shadow Financial System”
District Attorney Bragg expressed concern about the growth of cryptocurrency, describing it as a “shadow financial system” that facilitates money laundering and other criminal activities. “Crypto is the go-to means for bad actors to move and hide the proceeds of crime,” he stated.
Bragg further urged that the time has come for unlicensed cryptocurrency businesses to face criminal repercussions for not adhering to due diligence requirements.
Senator Myrie echoed Bragg’s sentiments, noting, “As the use of crypto has grown, so has illicit activity.” He emphasized that New York, as a major financial hub, must take seriously its regulatory responsibilities.
Myrie’s bill aims to align the state with the 18 other jurisdictions that have made unlicensed virtual currency transactions criminal offenses, to enhance consumer protection against potential fraud and scams.
This legislative push coincides with a letter from House Democrats to Securities and Exchange Commission (SEC) Chair Paul Atkins, in which several lawmakers urged the reinstatement of enforcement actions against digital asset firms.
The letter sent on Thursday and signed by Representatives Maxine Waters, Sean Casten, and Brad Sherman, expressed deep concerns regarding the SEC’s recent retreat from prosecuting violations related to “digital asset securities.”
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