Coinbase's Pivot to a Multi-Dimensional Revenue Network

In the window period where regulatory favor begins to emerge and on-chain settlement infrastructure gradually becomes more complete, Coinbase has chosen to use its platform as a hub to build a multi-dimensional revenue network centered on compliance and characterized by diverse asset liquidity. This strategy is key to Coinbase's transformation from a cryptocurrency exchange to an on-chain financial operating system.

Original Title: "Base's 'Onchain Summer' Has Finally Arrived"

On June 18, the U.S. Senate formally passed the GENIUS Act, marking the first time the U.S. government has legislatively acknowledged the compliance and legitimacy of crypto assets. This move breaks the previous regulatory vacuum caused by the unclear jurisdiction between the SEC and the CFTC.

JPMorgan and Coinbase's Major Announcements

Against this backdrop of regulatory favor, JPMorgan and Coinbase announced significant progress on the same day, focusing on on-chain banking and tokenized securities, respectively. This shows the deep integration of traditional finance and the crypto ecosystem.

JPMorgan's Deposits on Base

JPMorgan, one of the most proactive traditional financial institutions in blockchain, announced the launch of a pilot project called JPMD (JPMorgan Deposit Token). JPMD is an on-chain token representing customer U.S. dollar bank deposits, based on a fractional reserve mechanism, and will be deployed on Base, the public blockchain supported by Coinbase.

JPMorgan's Blockchain Division Kinexys

Naveen Mallela, co-head of JPMorgan's blockchain division Kinexys, said the bank will complete its first JPMD transfer in the coming days, moving funds from its digital wallet to the Coinbase platform. This will pave the way for institutional clients to use the token for on-chain transactions in the future.

The pilot is expected to last several months, marking JPMorgan's further exploration of efficient and secure institutional-grade transaction tools through on-chain deposit tokens. The day before, the bank had applied for the "JPMD" trademark, covering digital asset payments, transfers, and transaction services, showing its long-term application intentions for this tool.

Why Deposit Tokens?

Despite speculation that JPMD's launch might signal a move into the stablecoin market, Naveen Mallela told Bloomberg that deposit tokens are a better alternative for institutional users than stablecoins. This is because they are based on a fractional reserve mechanism and are more scalable.

He pointed out that deposit tokens represent actual U.S. dollar deposits in customer bank accounts, operating within the traditional banking system. In contrast, stablecoins are digital representations of fiat currency backed by cash and equivalents, with a legal status and operational logic that is more detached from the traditional financial system.

Discussions with the SEC

As the JPMD pilot begins, three core executives from JPMorgan have held closed-door talks with the SEC's Crypto Task Force. They discussed how capital market tools can be migrated to public blockchains, the potential impact on market structure, and how institutions should assess the risk and return models of on-chain finance.

According to the SEC's meeting minutes, the discussions covered cutting-edge topics such as digital repurchase agreements, digital debt instruments, and on-chain financing. JPMorgan also clearly stated that it is actively evaluating whether it can form a structural competitive advantage in asset tokenization and on-chain settlement efficiency.

Coinbase's Tokenized Stock Plans

Coinciding with JPMorgan's exploration of on-chain banking, Coinbase is evolving from an exchange platform to an on-chain asset infrastructure provider. The company's Chief Legal Officer, Paul Grewal, revealed that Coinbase is applying for a no-action letter from the U.S. SEC. This would allow it to launch tokenized stock trading services to U.S. customers, subject to exemptions or permissions.

If approved, this would mean that SEC staff would not take enforcement action against Coinbase for launching tokenized stock services. It would also mark the first time a platform has achieved a closed loop of "stablecoin purchase → on-chain settlement → stock trading → reward consumption" within the same platform. This could challenge the trading entry positions of brokers like Robinhood and Charles Schwab and may force these platforms to consider introducing stablecoin payments and on-chain settlement logic, pushing the entire securities industry into the on-chain asset era.

Tokenized stocks promise faster settlement speeds, longer trading windows, and lower operational costs. However, U.S. investors currently cannot access such products. Coinbase's new plan indicates that it aims not only to be the "NASDAQ" for crypto assets but also the on-chain entry point for traditional securities trading.

Coinbase's Previous Attempts

In fact, this is not Coinbase's first attempt at tokenized stocks. As early as the S-1 filing stage before the company's IPO in 2021, it had planned to tokenize its own stock, COIN. However, the plan was shelved after failing to gain SEC approval.

This latest attempt is Coinbase's latest move to expand its business beyond crypto assets, aiming to create new revenue streams and drive further institutional adoption. Just last week, Coinbase launched a credit card supported by American Express and partnered with Shopify and Stripe to promote the use of USDC stablecoin payments.

Regulatory Uncertainty and Competition

Regulatory uncertainty has long been a major barrier to the widespread adoption of blockchain securities trading. However, with the SEC's plans to adopt DeFi and stablecoins, regulation is no longer a concern for Coinbase.

At the same time, competition is intensifying. Coinbase's announcement of tokenized stocks follows Kraken's xStocks project announced weeks earlier. The latter has already begun offering on-chain trading services for more than 50 stocks and ETFs to markets in Europe, Latin America, Africa, and Asia. Coinbase needs a faster and clearer regulatory pathway to compete in the new round of crypto-brokerage competition.

Revenue-Driven Strategies

According to statistics, retail trading accounts for only about 18% of Coinbase's volume. Since 2024, the transaction volume of Coinbase's institutional clients has continued to increase (in Q1 2024, the transaction volume was $256 billion, accounting for 82.05% of the total transaction volume). With Coinbase's integration of the DEX on Base, it should be able to introduce significant liquidity to tens of thousands of tokens on the Base chain. More importantly, a large number of products in the Base ecosystem will have the possibility of a compliant connection to the real world through Coinbase.

This month, Coinbase has partnered with Shopify to support USDC payments on e-commerce checkout pages, entering the cross-border stablecoin payment market. It has also integrated the DEX on Base into the main Coinbase application, creating a liquidity channel between on-chain assets and CeFi users. The most disruptive move is the announcement of launching 24/7 perpetual contract trading in the U.S., in line with the CFTC regulatory framework.

Behind these moves is a core goal—rebuilding Coinbase's revenue model. As spot trading income continues to shrink year by year, Coinbase's financial reports show that its trading revenue is overly dependent on the crypto market cycle. Against this backdrop, derivatives have become a more cyclical-resistant source of income. By integrating Deribit's liquidity and user base, Coinbase is building a derivatives trading loop面向全球机构，而 CFTC 背书也令其在美国市场形成合规护城河。

Coinbase's Multi-Faceted Strategy

Coinbase's multi-faceted strategy is not accidental. In the window period where regulatory favor begins to emerge and on-chain settlement infrastructure gradually becomes more complete, Coinbase has chosen to use its platform as a hub to build a multi-dimensional revenue network centered on compliance and characterized by diverse asset liquidity. This strategy is key to Coinbase's transformation from a cryptocurrency exchange to an on-chain financial operating system.

Coinbase's Collaboration with Shopify and Stripe

Coinbase has partnered with Shopify to support USDC payments on e-commerce checkout pages, entering the cross-border stablecoin payment market. It has also integrated the DEX on Base into the main Coinbase application, creating a liquidity channel between on-chain assets and CeFi users. The most disruptive move is the announcement of launching 24/7 perpetual contract trading in the U.S., in line with the CFTC regulatory framework.

Behind these moves is a core goal—rebuilding Coinbase's revenue model. As spot trading income continues to shrink year by year, Coinbase's financial reports show that its trading revenue is overly dependent on the crypto market cycle. Against this backdrop, derivatives have become a more cyclical-resistant source of income. By integrating Deribit's liquidity and user base, Coinbase is building a derivatives trading loop

Coinbase's Multi-Faceted Strategy

Coinbase's multi-faceted strategy is not accidental. In the window period where regulatory favor begins to emerge and on-chain settlement infrastructure gradually becomes more complete, Coinbase has chosen to use its platform as a hub to build a multi-dimensional revenue network centered on compliance and characterized by diverse asset liquidity. This strategy is key to Coinbase's transformation from a cryptocurrency exchange to an on-chain financial operating system.

Coinbase's Collaboration with Shopify and Stripe

Coinbase has partnered with Shopify to support USDC payments on e-commerce checkout pages, entering the cross-border stablecoin payment market. It has also integrated the DEX

Coinbase's Pivot to a Multi-Dimensional Revenue Network

In the window period where regulatory favor begins to emerge and on-chain settlement infrastructure gradually becomes more complete, Coinbase has chosen to use its platform as a hub to build a multi-dimensional revenue network centered on compliance and characterized by diverse asset liquidity. This strategy is key to Coinbase's transformation from a cryptocurrency exchange to an on-chain financial operating system.

Original Title: "Base's 'Onchain Summer' Has Finally Arrived"

On June 18, the U.S. Senate formally passed the GENIUS Act, marking the first time the U.S. government has legislatively acknowledged the compliance and legitimacy of crypto assets. This move breaks the previous regulatory vacuum caused by the unclear jurisdiction between the SEC and the CFTC.

JPMorgan and Coinbase's Major Announcements

Against this backdrop of regulatory favor, JPMorgan and Coinbase announced significant progress on the same day, focusing on on-chain banking and tokenized securities, respectively. This shows the deep integration of traditional finance and the crypto ecosystem.

JPMorgan's Deposits on Base

JPMorgan, one of the most proactive traditional financial institutions in blockchain, announced the launch of a pilot project called JPMD (JPMorgan Deposit Token). JPMD is an on-chain token representing customer U.S. dollar bank deposits, based on a fractional reserve mechanism, and will be deployed on Base, the public blockchain supported by Coinbase.

JPMorgan's Blockchain Division Kinexys

Naveen Mallela, co-head of JPMorgan's blockchain division Kinexys, said the bank will complete its first JPMD transfer in the coming days, moving funds from its digital wallet to the Coinbase platform. This will pave the way for institutional clients to use the token for on-chain transactions in the future.

The pilot is expected to last several months, marking JPMorgan's further exploration of efficient and secure institutional-grade transaction tools through on-chain deposit tokens. The day before, the bank had applied for the "JPMD" trademark, covering digital asset payments, transfers, and transaction services, showing its long-term application intentions for this tool.

Why Deposit Tokens?

Despite speculation that JPMD's launch might signal a move into the stablecoin market, Naveen Mallela told Bloomberg that deposit tokens are a better alternative for institutional users than stablecoins. This is because they are based on a fractional reserve mechanism and are more scalable.

He pointed out that deposit tokens represent actual U.S. dollar deposits in customer bank accounts, operating within the traditional banking system. In contrast, stablecoins are digital representations of fiat currency backed by cash and equivalents, with a legal status and operational logic that is more detached from the traditional financial system.

Discussions with the SEC

As the JPMD pilot begins, three core executives from JPMorgan have held closed-door talks with the SEC's Crypto Task Force. They discussed how capital market tools can be migrated to public blockchains, the potential impact on market structure, and how institutions should assess the risk and return models of on-chain finance.

According to the SEC's meeting minutes, the discussions covered cutting-edge topics such as digital repurchase agreements, digital debt instruments, and on-chain financing. JPMorgan also clearly stated that it is actively evaluating whether it can form a structural competitive advantage in asset tokenization and on-chain settlement efficiency.

Coinbase's Tokenized Stock Plans

Coinciding with JPMorgan's exploration of on-chain banking, Coinbase is evolving from an exchange platform to an on-chain asset infrastructure provider. The company's Chief Legal Officer, Paul Grewal, revealed that Coinbase is applying for a no-action letter from the U.S. SEC. This would allow it to launch tokenized stock trading services to U.S. customers, subject to exemptions or permissions.

If approved, this would mean that SEC staff would not take enforcement action against Coinbase for launching tokenized stock services. It would also mark the first time a platform has achieved a closed loop of "stablecoin purchase → on-chain settlement → stock trading → reward consumption" within the same platform. This could challenge the trading entry positions of brokers like Robinhood and Charles Schwab and may force these platforms to consider introducing stablecoin payments and on-chain settlement logic, pushing the entire securities industry into the on-chain asset era.

Tokenized stocks promise faster settlement speeds, longer trading windows, and lower operational costs. However, U.S. investors currently cannot access such products. Coinbase's new plan indicates that it aims not only to be the "NASDAQ" for crypto assets but also the on-chain entry point for traditional securities trading.

Coinbase's Previous Attempts

In fact, this is not Coinbase's first attempt at tokenized stocks. As early as the S-1 filing stage before the company's IPO in 2021, it had planned to tokenize its own stock, COIN. However, the plan was shelved after failing to gain SEC approval.

This latest attempt is Coinbase's latest move to expand its business beyond crypto assets, aiming to create new revenue streams and drive further institutional adoption. Just last week, Coinbase launched a credit card supported by American Express and partnered with Shopify and Stripe to promote the use of USDC stablecoin payments.

Regulatory Uncertainty and Competition

Regulatory uncertainty has long been a major barrier to the widespread adoption of blockchain securities trading. However, with the SEC's plans to adopt DeFi and stablecoins, regulation is no longer a concern for Coinbase.

At the same time, competition is intensifying. Coinbase's announcement of tokenized stocks follows Kraken's xStocks project announced weeks earlier. The latter has already begun offering on-chain trading services for more than 50 stocks and ETFs to markets in Europe, Latin America, Africa, and Asia. Coinbase needs a faster and clearer regulatory pathway to compete in the new round of crypto-brokerage competition.

Revenue-Driven Strategies

According to statistics, retail trading accounts for only about 18% of Coinbase's volume. Since 2024, the transaction volume of Coinbase's institutional clients has continued to increase (in Q1 2024, the transaction volume was $256 billion, accounting for 82.05% of the total transaction volume). With Coinbase's integration of the DEX on Base, it should be able to introduce significant liquidity to tens of thousands of tokens on the Base chain. More importantly, a large number of products in the Base ecosystem will have the possibility of a compliant connection to the real world through Coinbase.

This month, Coinbase has partnered with Shopify to support USDC payments on e-commerce checkout pages, entering the cross-border stablecoin payment market. It has also integrated the DEX on Base into the main Coinbase application, creating a liquidity channel between on-chain assets and CeFi users. The most disruptive move is the announcement of launching 24/7 perpetual contract trading in the U.S., in line with the CFTC regulatory framework.

Behind these moves is a core goal—rebuilding Coinbase's revenue model. As spot trading income continues to shrink year by year, Coinbase's financial reports show that its trading revenue is overly dependent on the crypto market cycle. Against this backdrop, derivatives have become a more cyclical-resistant source of income. By integrating Deribit's liquidity and user base, Coinbase is building a derivatives trading loop面向全球机构，而 CFTC 背书也令其在美国市场形成合规护城河。

Coinbase's Multi-Faceted Strategy

Coinbase's multi-faceted strategy is not accidental. In the window period where regulatory favor begins to emerge and on-chain settlement infrastructure gradually becomes more complete, Coinbase has chosen to use its platform as a hub to build a multi-dimensional revenue network centered on compliance and characterized by diverse asset liquidity. This strategy is key to Coinbase's transformation from a cryptocurrency exchange to an on-chain financial operating system.

Coinbase's Collaboration with Shopify and Stripe

Coinbase has partnered with Shopify to support USDC payments on e-commerce checkout pages, entering the cross-border stablecoin payment market. It has also integrated the DEX on Base into the main Coinbase application, creating a liquidity channel between on-chain assets and CeFi users. The most disruptive move is the announcement of launching 24/7 perpetual contract trading in the U.S., in line with the CFTC regulatory framework.

Behind these moves is a core goal—rebuilding Coinbase's revenue model. As spot trading income continues to shrink year by year, Coinbase's financial reports show that its trading revenue is overly dependent on the crypto market cycle. Against this backdrop, derivatives have become a more cyclical-resistant source of income. By integrating Deribit's liquidity and user base, Coinbase is building a derivatives trading loop

Coinbase's Multi-Faceted Strategy

Coinbase's multi-faceted strategy is not accidental. In the window period where regulatory favor begins to emerge and on-chain settlement infrastructure gradually becomes more complete, Coinbase has chosen to use its platform as a hub to build a multi-dimensional revenue network centered on compliance and characterized by diverse asset liquidity. This strategy is key to Coinbase's transformation from a cryptocurrency exchange to an on-chain financial operating system.

Coinbase's Collaboration with Shopify and Stripe

Coinbase has partnered with Shopify to support USDC payments on e-commerce checkout pages, entering the cross-border stablecoin payment market. It has also integrated the DEX