Major US exchange challenges SEC tokenization rule

TLDR

Coinbase is formally opposing a new SEC tokenization proposal that could give issuers veto power over tokenized versions of their stocks.

1. Coinbase filed a detailed submission arguing the SEC should not require issuer consent for third-party tokenization of already public securities.
2. The company says strict consent rules would slow tokenized markets, limit 24/7 on-chain trading, and push innovation and liquidity outside the United States.
3. The key next step is how the SEC responds, especially given its recent approval of Nasdaqs tokenized trading plan, which signals growing but tightly managed tokenization.

Deep Dive

1. Coinbases Challenge And SEC Plan

On 1 April 2026, Coinbase submitted a formal paper to the SECs Crypto Task Force titled Why Third-Party Tokenization of Publicly Traded Securities Should Not Require Issuer Approval summarized here.

According to the filing, the SEC is exploring a rule that would force platforms to get explicit permission from the company that issued a stock before creating a tokenized version of those shares on-chain. Coinbase argues this conflicts with Section 4(a)(1) of the Securities Act and transfer-agent rules (Rule 17Ad-20), which historically allow free secondary-market transfers without issuer control once a security is publicly traded.

Coinbases core claim is that tokenization, as they envision it, simply represents existing shares on a blockchain, keeping the same voting, dividend and corporate action rights, rather than creating a new security.

2. Why Issuer Consent Rules Matter

Requiring issuer approval sounds narrow but could reshape how tokenized assets evolve. Coinbase warns that giving issuers veto power over tokenized representations would entrench closed, incumbent-controlled systems and block independent platforms from experimenting with new models.

In its submission, Coinbase highlights potential benefits of tokenization such as T+0 settlement, 24/7 trading, fewer intermediaries and easier peer-to-peer transfers, plus compatibility with DeFi if regulations allow these points are detailed here.

3. What To Watch Next

There is a broader trend of traditional markets moving on-chain. The SEC recently approved a Nasdaq plan to trade certain securities in tokenized form, a step toward integrating blockchain with traditional market plumbing as described in this regulatory roundup.

Coinbase proposes a dual framework where both issuers and qualified third parties can tokenize publicly traded stocks. The SECs eventual stance will signal whether the United States leans toward open interoperability with DeFi, or a more limited model where only a small set of regulated players can operate tokenized markets.

For crypto users, the outcome affects how easily tokenized Treasuries, equities and ETFs can interact with on-chain lending, trading and structured products built on public blockchains.

Conclusion

A major US exchange is pushing back on an SEC tokenization rule that could centralize control of tokenized securities with issuers. The SECs response, set against growing institutional tokenization efforts like Nasdaqs, will shape whether on-chain finance develops as an open, composable layer tied into DeFi, or as a more closed extension of todays brokerage and exchange infrastructure.