Crypto exchange Coinbase announced Wednesday that it was making progress towards the goal of becoming a federally regulated broker-dealer of securities.
Asiff Hiriji, the Chief Operating Officer and President of Coinbase wrote in their company blog post that the firm is currently in the process of getting a broker-dealer license, alternative trading system license and a registered investment advisor license. Once the firm has these licenses, they intend to get the approval of the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) to start offering blockchain-based securities.
Part of the efforts include the firm’s acquisition of Keystone Capital Corp., Venovate Marketplace, and Digital Wealth LLC, he wrote in the blog post.
Hirji explained Coinbase’s plans, saying that:
“We believe this is an important moment for the crypto ecosystem and yet another indication of the maturation of the crypto economy. If approved, these licenses will set Coinbase on a path to offer future services that include crypto securities trading, margin and over-the-counter (OTC) trading, and new market data products.”
Aside from offering its own tokens, the COO explained that Coinbase could also tokenize existing securities products. He said this would bring the benefits of cryptocurrency-based markets to securities.
The benefits include real-time settlement, transparent chain-of-title, and 24/7 trading.
The move comes on the heels of Coinbase’s announcement that it had bought Paradex and that it was planning to rebrand its GDAX service, renaming it Coinbase Pro.
Coinbase also announced the launch of Coinbase Custody, its crypto storage service aimed at financial institutions, last month. Coinbase Custody includes a suite of products and services targeted at institutional investors.
Coinbase’s COO pointed out what he saw as potential for combining crypto with securities firms in the post. He wrote that:
“We believe this will democratize access to capital markets for companies and investors alike, lowering costs for all participants and bringing additional transparency and inclusion to the ecosystem.”