Coinbase Soars on SEC Tokenization Exemption, Sets Sights on $200

Coinbase's stock surged to $192.59 on Friday after the SEC issued a five-year tokenization exemption, reversing earlier losses tied to a Senate bill that could have limited its ability to trade tokenized versions of U.S.-listed stocks.

The exemption allows regulated Tokenized Securities Venues to trade these tokens through permissioned automated market makers and liquidity pools, exempting qualifying liquidity providers from dealer registration. Coinbase is well-positioned to benefit from this development on three fronts: it operates the Base Ethereum layer-2 network, which will be used for tokenized stock trading; it already runs a platform that facilitates such trades; and its stock price reflects growing conviction in the company's ability to profit from these transactions.

The exemption also sets guardrails for regulated venues, including public notice requirements, transaction transparency, and technology safeguards. This regulatory clarity has lifted Coinbase's stock, which closed at $173.97 on Thursday after gaining 5% on news of the exemption. The company's revenue fell to $1.22 billion in Q2, but its subscription and services business reached 48% of net revenue.