According to reports, on June 16th, Coinbase Global, Inc. (COIN.US) unveiled a suite of 21 new products across trading, lending, payments, and on-chain infrastructure during its System Update event. Among these, its tokenized stock service has garnered significant industry attention.
The platform announced it would launch tokenized U.S. stocks for non-U.S. users the following month, promising 1:1 asset backing, full shareholder rights, dividend entitlements, and collateralized borrowing capabilities for holders, while explicitly excluding U.S. residents from participation. Despite Coinbase's repeated assertions that these tokens represent genuine equity ownership, it has not disclosed the specific legal framework supporting this claim, creating an information gap that raises concerns about future compliance and rights enforcement.
The product launch also introduced the B20 token standard deployed on the Base public blockchain, a layered compliance control toolkit analogous to Uniswap v4 hooks. However, Coinbase did not clarify how the B20 standard will be deeply integrated into the tokenized stock system, creating a disconnect between the technical implementation path and compliance logic.
Simultaneously, the AI-powered investment tool Coinbase Advisor, embedded within the app, also went live. This tool has completed registration with the SEC as an investment adviser and filed as a commodity trading advisor with the National Futures Association, initially available only to Coinbase One members in the United States.
Furthermore, the new product matrix includes cryptocurrency and stock options trading, perpetual contracts for real-world assets and pre-IPO targets (with SpaceX as the first), the Base privacy platform for institutional compliance trading, and a Bitcoin-backed loan service launched in partnership with Better.
Analysis indicates Coinbase's strategic intent to expand into traditional financial products is clear, with plans to launch options and perpetual contracts for all asset categories, suggesting tokenized stocks will also spawn more complex financial derivatives in the future.
Within the tokenized stock arena, the industry widely believes Coinbase is most likely adopting a third-party issuer wrapper model, operating solely in offshore markets at this stage. This structural logic closely resembles that of xStocks: underlying stocks are held in a third-party investment vehicle, whose shares are then tokenized. The resulting tokens can circulate in offshore venues or be withdrawn to self-custody wallets for DeFi use.
This model fundamentally differs from the issuer-direct model championed by firms like Galaxy and Superstate, which establishes a more direct legal connection. It is precisely this wrapper model that creates contradictions in Coinbase's claims of true equity ownership. If a third-party wrapper entity is involved, promises of dividends, voting rights, and other benefits do not originate from the underlying listed company but are bound within a service agreement between the token holder and the wrapper institution. In essence, there is no direct legal relationship between the token holder and the issuing company.
The industry currently lacks a mature solution that balances the advantages of issuer-direct and third-party wrapper models. A potential balance might be achieved through a stock rights mechanism, but Coinbase has yet to publicly disclose these critical architectural details.
It has been noted that the third-party wrapper model has recently exposed operational risks on multiple occasions, with last week's SpaceX primary market share incident serving as a typical warning. Previously, platforms including Binance Wallet, Bybit, and Bitget listed SpaceX (SPCX.US) IPO reserved shares obtained through xStocks channels, ultimately canceling all orders and refunding users because the underlying shares could not be delivered. Bybit explicitly informed users that xStocks could not deliver the underlying asset, and the platform failed to secure any SpaceX shares. Kraken and xStocks' own users received only a small portion of their requested allocations.
The technical barrier to minting tokens is extremely low; the real challenge lies in the aggregation, custody, and on-chain verification of the underlying assets. This is the inherent structural risk for all third-party wrapper products: without official cooperation from the listed company, there is no guarantee the intermediary holds the full amount of real stock.
All of the above business developments are set against a backdrop of two unresolved regulatory policies. According to reports, the core policy disagreement centers on whether exemptions should include third-party wrapped tokens or only open up to issuer-direct tokens. The controversy focuses on a clause permitting third-party token trading—tokens representing digital certificates for stock issued without the knowledge or permission of the underlying listed company during the issuance process. SEC Commissioner Hester Peirce has publicly stated that exemption policies should only cover secondary market native digital stock certificates, not various synthetic assets.
Analysis concludes that the core value of Coinbase's product depends entirely on whether a third-party wrapper entity can achieve compliance effectiveness equivalent to direct issuer-held equity. However, regulators have not yet provided a clear determination on this matter, leaving the future trajectory highly uncertain.
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