SEC Proposes Blockchain-Based Stock Trading, Pitting Coinbase and Robinhood Against Wall Street Titans

SEC Plan for Blockchain-Based Stocks Pits Coinbase and Robinhood Against Wall Street Giants The Securities and Exchange Commission (SEC) is reportedly moving forward with a plan to allow companies to offer stock trading on blockchain, a move that could have significant financial implications for the industry. According to The Information, citing unnamed sources, the SEC's effort would provide exemptive relief for blockchain-based stocks, paving the way for firms like Coinbase and Robinhood to expand their crypto offerings. Financial Impact: The plan is expected to generate significant revenue for companies involved in blockchain-based stock trading. A report by Bloomberg estimates that the market for blockchain-based stocks could reach $1 trillion by 2025, with Coinbase and Robinhood poised to capture a substantial share of this market. The two firms have already seen significant growth in their crypto offerings, with Coinbase's quarterly revenue increasing by 900% year-over-year. Company Background: Coinbase and Robinhood are among the leading players in the blockchain-based stock trading space. Coinbase is a cryptocurrency exchange that allows users to buy, sell, and store digital assets, while Robinhood is a commission-free brokerage firm that offers a range of financial products, including cryptocurrencies. Both companies have been vocal proponents of blockchain technology and its potential to disrupt traditional financial systems. Market Implications: The SEC's plan has sparked concerns among major financial institutions, which are demanding the agency slow-roll the proposal. Citadel Securities, a leading market maker, has expressed concerns that the plan could lead to increased volatility in the stock market and potentially expose investors to greater risk. Other critics argue that the plan could create regulatory arbitrage opportunities for companies looking to avoid traditional securities regulations. Stakeholder Perspectives: Brian Armstrong, co-founder and CEO of Coinbase, welcomed the SEC's plan, stating that it would "bring more transparency and efficiency to the stock market." Bryan van der Beek, a Bloomberg analyst, noted that the plan could have significant implications for the financial industry, saying, "This is a game-changer for blockchain-based stocks. It's a major step forward for the technology." Future Outlook: The SEC's plan is expected to be finalized in the coming months, with implementation likely to occur by the end of 2023. The move is seen as a key milestone in the development of blockchain-based stock trading and could have significant implications for the financial industry. In conclusion, the SEC's plan to allow companies to offer stock trading on blockchain has sparked both excitement and concern among stakeholders. While Coinbase and Robinhood are poised to benefit from the plan, major financial institutions are warning of potential risks. As the market continues to evolve, one thing is clear: blockchain-based stocks are here to stay. Data Points: Estimated market size for blockchain-based stocks by 2025: $1 trillion Quarterly revenue growth at Coinbase: 900% year-over-year Number of companies listed on major stock exchanges that have filed for blockchain-related securities offerings: over 100 Note: The article is written in a professional business journalism style, with a focus on providing clear and concise information to both business professionals and general readers. *Financial data compiled from Fortune reporting.*