GuShiio.com If it goes smoothly, U.S. stocks will become the third largest category of RWA assets after stablecoins (USDT, USDC) and treasury bonds (Buidl).
Narrative background
Just a few days ago, Coinbase CEO Brian Armstrong and CFO Alesia Haas both expressed their consideration of tokenizing Coinbase’s shares in order to hand over Yimei shares on the Base blockchain.
In this tedious and innovative encryption cycle dominated by PVP-based, we finally see the dawn of something interesting.
If it goes smoothly, U.S. stocks will become the third largest type of RWA assets after stablecoins (USDT, USDC) and treasury bonds (Buidl). If the regulatory and compliance framework is clear and provides enough freedom for U.S. stocks ‘tokens, U.S. stock tokenized assets should have the hope of surpassing the current size of government-Treasurized tokens in the short term because they provide the high volatility and speculative nature that crypto users prefer.
business logic
Compared with narratives such as Crypto AI agent and desci (decentralized scientific research) that appear in this cycle, the value proposition of U.S. stocks on the chain is clear, and the needs of both supply and demand sides are clear. Specifically:
The value proposition of U.S. stocks listed in the chain is similar to other Defi products, reflected in the larger free market and superior composability:
1. Expand the size of the trading market: Provide a 24-hour, borderless, and license-free trading venue for U.S. stock trading, which is currently impossible for Nasdaq and the New York Stock Exchange (although Nasdaq is already applying for 24-hour trading, it is expected to take until the second half of 26 years)
2. Superior combinability: By combining with other existing Defi infrastructure, U.S. stock assets can be used as collateral, margin, index and fund products, deriving many ways of playing that are currently unimaginable
The needs of both supply and demand sides are also clear:
Supply side (U.S. listed companies): Through the borderless blockchain platform, it reaches potential investors from around the world and obtains more potential buying orders
Demand side (investors): Many investors who were unable to directly trade U.S. stocks in the past for various reasons can directly allocate and speculate on U.S. stock assets through blockchain
In fact, the idea of listing U.S. stocks has been tried long before. For example, Coinbase actually tried to list by issuing security-based tokens (representing its stock $COIN) as early as 2020, but it was shelved due to regulatory obstacles from the U.S. SEC.
In the last round of Defi craze, we also saw U.S. stock synthetic assets in products such as Terra’s Mirror and Ethereum’s Synthetix, but they gradually declined due to the SEC’s regulatory deterrence.
Earlier, Polymath, a securitization token issuance project founded and funded in 2017, promoted the concept of STO (Security Token Offering), which means that companies issue tokens representing securities rights and interests through blockchain technology, and investors obtain similar rights to traditional financial instruments such as stocks and bonds (such as dividends and voting rights), which also attracted a lot of market attention at that time.
Today, the main driving force for the resurgence of the STO concept and the feasibility of U.S. stocks comes from the substantive attitude shift of the SEC after the change, from strong regulatory confrontation in the past to innovative support within the compliance framework.
Within visual reach, STO may be one of the few encrypted business narratives in this cycle with great impact, reasonable business logic, and high ceilings.
relevant targets
Starting from the background and logic of the narrative, we can sort out what are the targets related to the encryption secondary market.
In fact, there are not many STO concept projects that have already issued coins and launched large companies.
Perhaps the most relevant one is Polymath, which was established in the 17 years mentioned above and was the first to conduct STO concept education in the crypto industry. It later launched the Polymesh blockchain, a publicly licensed blockchain specifically for compliance assets (such as securities tokens), with built-in identity authentication, compliance check, privacy protection, governance and instant settlement functions.
Polymesh has a good reputation in the industry, including BlackRock’s issuance of US$500 million digital bonds on Polymesh in November last year, and real estate giant CBRE also issued real estate share tokens based on it.
Polymesh’s token has been launched on Binance. The token name is Polyx. Currently, both MC and FDV are 100 million +, and the market value is not high.
In addition, although RWA concept projects such as Ondo have mainly focused on the issuance of tokenized assets in the national debt sector in the past, their products can also be adjusted according to compliance regulations to serve the tokenization scenario of stocks. Moreover, Ondo is very close to the Trump family, and may gain more overt or covert convenience, even the platform of Trump family members (although the marginal impact of such actions has become weaker and weaker).
Chainlink has also done a lot of work to connect many traditional financial institutions and blockchain. As a mainstream oracle solution and securities tokenization service provider, it will theoretically benefit from this.
Risks that need attention
The reason why the title of this article uses it implicit rather than undisclosed is that there are still many uncertainties about whether it can take effect. Although judging from the various measures taken by the new SEC team (withdrawing a large number of encryption lawsuits), its attitude towards STO tends to be relaxed, it is still unknown when a clear compliance framework used to guide STO will be introduced and needs to be closely observed. This determines the speed at which companies such as Coinbase follow up and advance.
The most recent observation event was the first roundtable meeting held by the SEC Cryptography Working Group on the 21st of this month. The roundtable itself was designed to provide a clear regulatory framework. The theme of this first meeting was Defining Securities Status: History and Future Paths. One of the agendas of the meeting is compliance path design.
What’s more noteworthy is that one of the keynote speakers came from Paul Grewal, chief legal officer of Coinbase, the starting protagonist of this STO narrative.
If the STO-related compliance framework is introduced slowly and the wait time is too long, the current surging narrative may be delayed or even annihilated.
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