Recent news suggests that Coinbase is gearing up for major strategic moves. Beyond being a top CEX in the U.S., it is also becoming one of the most anticipated projects globally. The launch of Coinbase’s token could be a significant catalyst, driving the explosive growth of the entire Base ecosystem.
Coinbase to tokenize COIN stock instead of launching the BASE token
Coinbase is restarting its plan to tokenize COIN shares, aiming to bring digital securities into the U.S. market. This initiative was first explored in 2020 but was abandoned due to regulatory challenges. Now, with a new crypto task force at the SEC, Coinbase sees an opportunity to integrate blockchain-based securities into traditional finance.
Source: TradingView
This move comes as the SEC has officially requested the dismissal of its lawsuit against Coinbase. The case accused the exchange of operating an unregistered trading, brokerage, and clearing platform. The regulator’s decision signals a major shift in its approach to digital assets.
Coinbase CEO Brian Armstrong has emphasized the benefits of tokenized securities and developed a Regulatory Framework for Security Tokens to drive blockchain adoption in traditional finance. In an interview with Decrypt, he stated, “We have no plans to launch any tokens for Base,” stressing that the platform’s priority is optimizing performance and lowering transaction costs on Layer 2 rather than issuing a token. Armstrong aims for 99% of transactions to settle within one second at under a cent without needing a new token. However, his stance contrasts with Coinbase’s Chief Legal Officer Paul Grewal, who suggested Base might release a token in the future.
This week, Armstrong is set to attend the first-ever White House Crypto Conference alongside former President Donald Trump. This event marks a significant step in strengthening dialogue between the blockchain industry and U.S. policymakers.
SEC Ends Legal Battle with Coinbase
Source: USA Today
The U.S. Securities and Exchange Commission (SEC) recently dropped its lawsuit against Coinbase, marking a significant event in the crypto industry. This decision, alongside the closure of investigations into Robinhood Crypto and Uniswap Labs, has raised many questions. Some believe this signals a shift in regulatory attitudes, while others suspect political motives behind the move.
Coinbase, Robinhood, and Uniswap have all contributed to political campaigns, including those linked to former President Donald Trump. The timing of the SEC’s decision has led to speculation about whether these donations influenced regulatory actions. If political support for crypto is growing, the industry could experience a more favorable legal environment in the near future.
With the SEC stepping back, attention now turns to the Commodity Futures Trading Commission (CFTC) and its potential role in crypto regulation. If the CFTC gains more authority over digital assets, companies may face fewer legal obstacles. A clearer regulatory framework would attract more businesses and investors to the U.S. market.
Future Potential of the Base Ecosystem
Base is a highly promising ecosystem, continuously developing innovative products. As a Layer 2 network built by Coinbase, launching a token (previously expected as BASE) seems essential for future airdrop rewards.
Coinbase’s move to tokenize its COIN stock is a significant step. The move could potentially make the COIN token the official asset of the Base ecosystem. Previously, CEO Brian Armstrong stated, “We have no plans to launch any token for Base.” However, this contrasts with the remarks by legal chief Paul Grewal that Base might introduce a token in the future.
Initially, Base had no plans for a native token and relied on ETH for transaction fees. However, recent reports suggest that Coinbase is considering tokenizing COIN stock on Base, unlocking new possibilities for the ecosystem.
Tokenizing COIN stock could bridge traditional securities with blockchain technology and position COIN as the official token of Base. Armstrong’s earlier statement against launching a Base token now appears uncertain, given Grewal’s indication that it remains a future possibility.
However, stock tokenization faces major regulatory challenges, particularly from the SEC. If Coinbase successfully navigates these hurdles, Base could emerge as a leading hub for decentralized financial solutions, attracting both developers and users. Despite these challenges, Base continues to show steady growth. At the time news about COIN tokenization surfaced, the ecosystem saw a sharp increase in key metrics such as new wallet addresses and daily transactions. This momentum has remained strong, further reinforcing Base’s potential for long-term expansion, especially if the COIN token launch proves successful.
Source: Dune
Common Challenges of Layer 2 Projects and Base’s Advantages
Layer 2 (L2) solutions are becoming a crucial trend in scaling Ethereum, improving performance, and reducing transaction costs. However, L2 projects still face significant challenges. Amid these difficulties, Base, developed by Coinbase, is demonstrating clear competitive advantages over other platforms.
L2 ecosystems such as Arbitrum, Optimism, zkSync, and Starknet are in a fierce battle to attract users and developers. This fragmentation makes it difficult for any single platform to dominate. However, Base has a major advantage as it is backed by Coinbase, one of the world’s largest crypto exchanges. This provides Base with a solid foundation from the start and easy access to over 110 million users in the U.S. alone.
One of the biggest hurdles for Layer 2 networks is asset withdrawal speed and liquidity when moving between Ethereum and L2. Many projects still require long withdrawal times (e.g., Optimistic Rollups take up to 7 days for confirmation). In contrast, Base is deeply integrated with Coinbase, allowing for instant deposits and withdrawals with strong liquidity, giving it a major edge over competitors.
While L2 solutions reduce congestion on Ethereum, interoperability between these networks remains incomplete. Users often rely on cross-chain bridges to move assets, leading to high costs and security risks. Base is addressing this issue by integrating directly with Ethereum and major DeFi ecosystems, ensuring seamless capital flow between platforms.
Source: growthepie.xyz
Ethereum’s market performance in Q1 2025 has been underwhelming, with liquidity significantly declining. Without major money games to attract capital, many L2 projects—including Base—are facing difficulties. However, Base continues to lead in revenue generation, significantly outperforming the second-largest Layer 2 network.
Can Base Maintain Its Lead?
Despite the overall slowdown in Ethereum’s ecosystem, Base is proving its strength with high adoption, deep liquidity, and a direct connection to Coinbase’s massive user base. If it maintains this momentum, Base could solidify its position as the leading Layer 2 solution, paving the way for even greater expansion.
Additionally, Base is benefiting from recent positive developments. The biggest concern—regulatory pressure and disputes with the SEC—seems to be easing, as the U.S. government is showing increasing interest in supporting the growth of the crypto industry. With a more favorable regulatory environment, Base has an even stronger foundation to thrive in the long term.
