Coinbase Pushes Real-Asset Backing for Tokenized Equities

Armstrong stated that Coinbase tokens represent direct claims on real shares held by an offshore special-purpose entity. Unlike derivatives that track price exposure, these tokens allow verified holders to redeem their assets for the underlying equities, provided they clear compliance hurdles. The model utilizes Alpaca Securities as a regulated custodian, placing the assets into a trust structure designed to isolate them from issuer insolvency.

While the exchange has added dividend reinvestment and plans for voting rights, the process remains indirect. Dividends are typically reinvested after accounting for 30% U.S. withholding taxes and a 5% issuer fee, which adjusts the deposit ratio over time. Furthermore, voting rights are not direct; token holders submit instructions through the issuer, which manages the proxy process under the constraints of Abu Dhabi Global Market law.

These products, which include tokens for companies like Nvidia, Apple, and Tesla, remain strictly unavailable to U.S. investors, trading instead under Regulation S exemptions. Despite this, the tokens have gained traction on decentralized platforms, with daily trading volumes reaching $100 million in September. Analysts at Galaxy Research have noted that while Coinbase markets these as real ownership, the legal relationship is filtered through a third-party wrapper rather than a direct registration on the corporate ledger of the underlying firms.