Coinbase and JPMorgan Push Blockchain Integration with Tokenized Finance Pilots

Two of the largest players in traditional and crypto finance are making coordinated moves to bring blockchain technology deeper into regulated financial markets. Coinbase is seeking regulatory approval to offer tokenized stock trading to US users, while JPMorgan is piloting its new deposit token, JPMD, on Coinbase’s Base network. Together, these efforts signal growing institutional interest in using blockchain infrastructure for mainstream financial products like equities and dollar-based payments.

Coinbase Eyes SEC Green Light to Launch Tokenized Stock Trading in the US

Coinbase, one of the largest cryptocurrency exchanges in the United States, is reportedly preparing to take a major step toward bridging traditional financial markets with blockchain technology. The company is seeking regulatory approval from the US Securities and Exchange Commission (SEC) to offer tokenized stock trading to its user base, according to a report published by Reuters on Tuesday.

Paul Grewal, Coinbase’s chief legal officer, said the initiative to launch “tokenized equities” is a “huge priority” for the company. The move, if approved, could enable Coinbase users to buy and sell blockchain-based representations of publicly traded stocks — such as Apple or Tesla — in a fractionalized, 24/7 trading format. Grewal did not disclose whether a formal request had already been submitted to the SEC, but the tone suggests Coinbase is actively engaged in discussions with regulators.

Tokenized Equities: A Growing but Restricted Market

Tokenized stocks, which mimic real shares but exist on blockchain rails, have gained momentum globally but remain restricted within the US due to securities laws. While companies like Kraken have announced plans to offer tokenized US stock trading to non-residents, US investors have been left out of the innovation wave due to regulatory uncertainty. Coinbase’s push for approval could change that narrative, paving the way for a new asset class to enter the American retail and institutional investment landscape.

Should the SEC be amenable, Coinbase would likely receive a “no-action letter,” a formal notice that the agency does not intend to pursue enforcement actions against the firm. Such a letter would not equate to full regulatory endorsement but would provide Coinbase with enough assurance to move forward cautiously.

Coinbase’s effort comes at a time when the US crypto regulatory environment appears to be softening. Since President Donald Trump returned to office in January, digital asset firms have expressed renewed optimism about policy direction and enforcement leniency. That optimism was bolstered in February, when the SEC dropped its 2023 enforcement action against Coinbase — a lawsuit that had loomed large over the company’s operations and growth plans.

With a more receptive political climate and mounting institutional interest in blockchain-based financial products, Coinbase seems poised to push forward aggressively on product diversification and global expansion.

While Coinbase eyes tokenized equities in the US, it is also making significant strides abroad. The company is reportedly on track to receive a license to operate across the European Union under the bloc’s new Markets in Crypto-Assets (MiCA) regulations, a landmark framework designed to harmonize crypto rules across all 27 EU member states.

However, Coinbase is not without its challenges. The firm is currently under scrutiny following reports that cybercriminals bribed some of its customer support agents based outside the United States. This alleged breach reportedly led to phishing attempts targeting user data, raising serious questions about operational security and risk management.

COIN Price Movement and Market Outlook

Shares of Coinbase (NASDAQ: COIN) were trading at $253.85 at the time of publication, reflecting a 2.95% decline over the past 24 hours. Despite the dip, the stock has performed strongly in recent months and secured a notable milestone in May by joining the S&P 500 index — the first crypto-native company to do so.

Coinbase share price (Source: Google Finance)

The potential launch of tokenized equity trading could provide a new revenue stream for Coinbase, especially as trading volumes in the crypto market remain volatile. It would also bring the firm into more direct competition with fintech players like Robinhood, which already offer traditional equities alongside crypto.

If successful, Coinbase’s foray into tokenized stocks could reshape how Americans access and interact with equities. Blockchain-based equities promise near-instant settlement, lower transaction fees, and fractional ownership — all attributes that appeal to younger, tech-savvy investors.

Moreover, the move could catalyze wider adoption of tokenized financial instruments, particularly if regulators view Coinbase’s efforts as a compliant blueprint for others in the space.

JPMorgan Launches JPMD Deposit Token on Coinbase’s Base Network in Groundbreaking Blockchain Pilot

Meanwhile, JPMorgan Chase has launched a pilot program for its newly trademarked deposit token, JPMD. The pilot will run on Coinbase’s Ethereum Layer-2 network, Base — a choice that reinforces Base’s growing dominance in the Layer-2 scaling ecosystem.

The pilot was confirmed by Naveen Mallela, an executive at Kinexys, JPMorgan’s blockchain division, in a statement to Bloomberg. Mallela revealed that a fixed supply of JPMD tokens will be transferred to Coinbase in the coming days, marking a pivotal step in JPMorgan’s broader strategy to modernize banking infrastructure through blockchain-powered solutions.

The transaction will be conducted in US dollars and will take place on the Base network, which was launched by Coinbase in 2023 and has since become the most widely adopted Ethereum Layer-2 solution by total value locked (TVL), according to data from CoinGecko and DefiLlama. With transaction throughput recently nearing 1,000 transactions per second — putting it in competition with high-speed networks like Solana — Base is seen as a highly capable infrastructure for scalable, low-cost institutional settlements.

Base’s total value locked (TVL) has more than doubled over the past year (Source: DefiLlama)

Following the pilot phase, JPMorgan plans to offer JPMD to Coinbase’s institutional clients for on-chain transactions and payments, broadening the use case for tokenized bank liabilities in decentralized ecosystems.

Deposit Tokens vs. Stablecoins: A Strategic Bet

Unlike stablecoins, which are typically issued by fintech or crypto firms and backed by fiat reserves held off-chain, deposit tokens are on-chain representations of actual deposits held at regulated banks. Mallela emphasized that deposit tokens like JPMD present a “superior alternative to stablecoins” from an institutional perspective, largely because they operate within the regulated banking ecosystem and are designed to be scalable.

“From an institutional standpoint, deposit tokens are a superior alternative to stablecoins,” Mallela said. “They are more scalable due to their fractional reserve structure and may eventually offer yield.”

This possibility of yield generation marks a significant departure from most stablecoins, which generally do not bear interest. Should JPMD eventually offer returns, it could provide a compelling incentive for institutional capital to migrate from stablecoins to bank-issued digital assets.

The timing of JPMorgan’s pilot also coincides with a growing debate within the financial sector over the potential disruption posed by yield-bearing stablecoins. NYU professor and financial consultant Austin Campbell recently suggested that the US banking industry is ”panicking” over the growing appeal of stablecoins that offer yield, warning that they could undermine the traditional banking model by draining retail deposits and offering superior alternatives to savings accounts.

Campbell’s comments reflect broader concerns among banking executives that decentralized finance (DeFi) and digital asset innovations may erode the monopoly banks have long held over the issuance and utility of fiat-denominated money.

Nevertheless, deposit tokens like JPMD represent a potential compromise between decentralization and traditional finance, allowing regulated institutions to harness blockchain innovation without ceding control over monetary infrastructure.

A Broader Blockchain Vision

JPMorgan’s blockchain ambitions extend well beyond JPMD. The company has invested heavily in its Onyx division, which has already deployed JPM Coin for internal settlements and launched various pilot programs involving tokenized assets, repo transactions, and programmable payments.

The introduction of JPMD — now backed by a formal trademark filing that covers a wide range of crypto-related services, including trading, payment processing, and digital wallet integration — further cements JPMorgan’s status as a frontrunner in institutional blockchain adoption.

While this specific pilot focuses on USD-denominated transfers, Mallela confirmed that additional currencies are on the roadmap, subject to global regulatory compliance.