US stocks on the blockchain and STO: a hidden narrative

Original author: Alex Xu (X: @xuxiaope ngmint )

Narrative Background

Just a few days ago, Coinbase CEO Brian Armstrong and CFO Alesia Haas both expressed their consideration of tokenizing Coinbase鈥檚 shares to enable trading of U.S. stocks on the Base blockchain.

在這個 加密貨幣 cycle where innovation is lackluster and PVP is the main focus, we are finally seeing the dawn of something interesting.

If all goes well, U.S. stocks will become the third largest category of RWA assets after stablecoins (USDT, USDC) and government bonds (Buidl). If the regulatory and compliance framework is clear and provides sufficient freedom for U.S. stock tokens, U.S. stock tokenized assets should have the potential to surpass the current scale of government bond tokens in the short term because they provide the high volatility and speculation that crypto users prefer.

Business Logic

Compared with the narratives such as Crypto AI agent and desci (decentralized scientific research) that appeared in this cycle, the value proposition of on-chain US stocks is clear, and the needs of both supply and demand are very clear. Specifically:

The value proposition of U.S. stocks on-chain is similar to other DeFi products, reflected in a larger free market and superior composability:

1. Expanded the scale of the trading market: It provides a 24/7, borderless, and license-free trading venue for U.S. stock trading, which is currently unavailable to NASDAQ and NYSE (although NASDAQ has applied for 24-hour trading, it is expected to be realized in the second half of 2026)

2. Superior composability: By combining with other existing DeFi infrastructure, U.S. stock assets can be used as collateral, margin, to build indexes and fund products, and derive many currently unimaginable gameplays.

The needs of both supply and demand are also clear:

Suppliers (US listed companies): Through the borderless blockchain platform, potential investors from all over the world were reached, and more potential buyers were obtained.

Demand side (investors): Many investors who were unable to trade U.S. stocks directly in the past for various reasons can now directly allocate and speculate on U.S. stock assets through blockchain

In fact, the idea of putting U.S. stocks on the blockchain has been attempted before. For example, Coinbase actually tried to go public by issuing security 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 synthetic assets of US stocks in products such as Terras Mirror and Ethereums Synthetix, but they gradually declined due to the regulatory deterrence of the SEC.

Earlier, Polymath, a securitized token issuance project founded and financed in 2017, promoted the concept of STO (Security 代幣 Offering), that is, companies issue tokens representing securities rights through blockchain technology, and investors obtain rights similar to traditional financial instruments such as stocks and bonds (such as dividends and voting rights), which also attracted a lot of attention from the market at the time.

Today, the main driving force behind the resurgence of the STO concept and the feasibility of putting U.S. stocks on the blockchain comes from the substantial shift in attitude of the SEC after the change of leadership, from the past strong regulatory confrontation to support for innovation within the compliance framework.

As far as we can see, STO may be one of the few crypto business narratives in this cycle with a large impact, reasonable business logic, and a high ceiling.

Related Subject Matter

Based on the background and logic of the narrative, we can sort out the targets related to the secondary market of encryption.

In fact, there are not many genuine STO concept projects that have issued tokens and listed on major exchanges.

The one with the highest correlation may be Polymath, which was founded in 2017 and was the first to educate the concept of STO in the crypto industry. It later launched the Polymesh blockchain, a public permissioned blockchain designed for compliant assets (such as security tokens) with built-in identity authentication, compliance checking, privacy protection, governance and instant settlement.

Polymesh has a good reputation in the industry. BlackRock issued a $500 million digital bond on Polymesh in November last year, and real estate giant CBRE also issued real estate share tokens based on it.

Polymeshs token has been listed on Binance. The token is called Polyx. Currently, MC and FDV are both over 100 million, and the market value is not high.

In addition, although Ondo and other RWA concept projects have mainly focused on the issuance of tokenized assets in the field of government bonds 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 get more conveniences, either explicit or implicit, and even the support of Trump family members (although the marginal impact of such actions has become weaker and weaker).

Chainlink has also done a lot of work in connecting many traditional financial institutions and blockchains. As a mainstream oracle solution and securities tokenization service provider, it will theoretically benefit from this.

Risks to watch out for

The reason why the title of this article uses hidden and unreleased to describe the narrative of this wave of STO is that there are still many uncertainties about whether it can take off. Although the various measures taken by the new SEC team (withdrawing a large number of crypto lawsuits) show that its attitude towards STO also tends to be relaxed, it is still unknown when a clear compliance framework for guiding STO will be introduced. It needs to be closely observed, which 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 Crypto Working Group on the 21st of this month. The roundtable itself was designed to provide a clear regulatory framework. The theme of the first meeting was Defining the Status of Securities: History and Future Paths. One of the agendas of the meeting was compliance path design.

What鈥檚 more noteworthy is that one of the keynote speakers is Paul Grewal, the chief legal officer of Coinbase, the protagonist of this STO narrative.

If the STO-related compliance framework is introduced slowly and the waiting time is too long, the current undercurrent narrative may be delayed or even annihilated.

Disclaimer: The information shared on this channel, as well as the authors comments on the information, may contain errors of fact and opinion and are for reference only. You are welcome to leave comments for discussion and correction.

原文連結

This article is sourced from the internet: US stocks on the blockchain and STO: a hidden narrative

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