A new report from Bernstein suggests that upcoming digital asset regulations could significantly benefit trading platforms like Robinhood and Coinbase. The anticipated regulatory framework promises a unified structure for trading both securities and non-securities, potentially unlocking new opportunities and streamlining operations for these companies.
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) will share authority in a complex regulatory structure. This new methodology has the potential to shake things up pretty big. This would enable Coinbase to list more assets, including those not subject to a legal grey area. Right now, we’re getting just a much more conservative set of like 250 tokens.
As a side note, the report points out that it is possible Coinbase would offer token-linked futures contracts in its listings. This is a great opportunity, sizeable though it is. Offshore futures volumes are rumored to be three or four times larger than spot volumes!
"With greater regulatory clarity, COIN can be more aggressive versus international exchanges," - Bernstein report
Robinhood stands to gain as well. The revamped framework would allow the platform to eventually offer tokenized equities of top global public and private enterprises. That would clear a path for Robinhood to develop new marketplaces from scratch too, like prediction markets like Polymarket. Next, Robinhood has kind of already started in this direction by fully integrating Polymarket, on the Kalshi platform.
Our third major benefit for Coinbase comes from the ability to accelerate its licensing process. Currently, Coinbase operates with multiple state licenses. The new rules would potentially open it up to be licensed as an alternative trading platform. This amendment would allow it to escape the onerous separate federal-state compliance dance.
The Bernstein report is worth reading for its points about the increasing indistinguishability of crypto and equity traders. Robinhood’s success in attracting young traders who actively engage in both equities and options markets is pushing operational efficiencies. This evolution highlights the need for collaborative platforms that can connect both hard and soft assets with ease.
Blockchain technology is similarly making inroads by driving new operational efficiencies across these platforms. Blockchain’s ability to automate and streamline myriad back-office processes has the potential to cut costs and enhance transparency.
These recent moves are indicative of the growing embrace of digital assets by institutions. This week, the SEC approved options trading on spot ETH ETFs from heavy-hitters BlackRock, Bitwise and Grayscale. While a highly anticipated approval, this would be a major milestone and continues to point towards digital assets growing even more mainstream.
"Clarity on listing crypto asset securities and tokenized equity securities would expand the addressable market for HOOD," - Bernstein report
