The SEC Has Given the Green Light to Tokenized Stock Trading. These 2 Crypto Stocks Will Be the Big Winners.

Key Points

• The SEC is temporarily allowing some crypto companies to offer trading of tokenized stocks.

• Coinbase and Robinhood are both looking to grow their revenue by promoting tokenized stock trading.

• There are still a few regulatory issues for those players to navigate before they can make significant money from their U.S. operations.

On Sept. 17, the Securities and Exchange Commission (SEC) granted a five-year exemption to the crypto industry that allows certain exchanges to offer tokenized versions of stocks for trading. Robinhood Markets(NASDAQ: HOOD) and Coinbase Global(NASDAQ: COIN) are both well-positioned to profit, but one has a big lead on the other.

Let's see what the stakes of the competition are, and then get into how these two players are planning to win this emerging space.

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Tokenization is still in its infancy

Tokenization is the process of adding ownership records to tokens stored on a blockchain. This is useful because it means that the assets can be traded 24/7 and generally settle transactions very rapidly compared to the alternatives.