Coinbase Tokenized Stocks Hit $100M in Volume; First Zcash ETF and Strategy Yield Goes DeFi

**Jennifer Sanasie** (0:00)
On today's Public Keys from the New York Stock Exchange, Coinbase brings tokenized stocks to its base blockchain. Grayscale debuts the first Zcash ETF, and a Solana protocol turns Strategies' preferred stock into a DeFi yield product. I'm Jen Sanasie. Let's get into it.
Hey, everyone. Welcome to this Wednesday edition of Public Keys. Coinbase issued tokenized stocks, went live on base recently. Starting with names like Apple, Alphabet, Meta and NVIDIA, backed one-to-one by a real share. Eligible users outside the US can trade them around the clock, and they've already cleared north of $100 million in volume. Here now to share more is Ben Spiegelman, Head of Institutional at Base. Hello.
Hi.

**Ben Spiegelman** (0:45)
How are you?

**Jennifer Sanasie** (0:46)
I'm doing great. How are you doing?

**Ben Spiegelman** (0:47)
Good. Good to see you. Happy to be here.

**Jennifer Sanasie** (0:49)
Yeah. Thanks for joining us. We're talking about this new product, tokenized stocks. I just want to lay a foundation here. We talk a lot about tokenized equities on this show, different products, different issuers launching different products. How does this differ from some of the ones that have come to market already?

**Ben Spiegelman** (1:05)
Yeah. No, thanks so much for having me. Appreciate it. I think in general, Coinbase was excited about tokenization broadly, and I think the tokenized equity product, there's been a handful of different instances in the market already, as we've seen, and Coinbase was a little bit later to the table, but we did that very intentionally. We wanted to make sure that we did it right.
The way in which Coinbase stocks is working specifically on this is that it's a one-for-one representation of the actual underlying stock to it actually being held in qualified custody in Abu Dhabi. So through ADGM and our partners, Alpaca, we're actually able to hold one-for-one the actual stock that is being tokenized in that custodial account. And there's a lot of benefits to that, I think specifically right when the authorized participants and the market makers who are making these markets, when they can redeem the tokenized version for the actual underlying ticker, I think they have a lot more comfort in the markets that they're making, better pricing, tighter spreads, deeper liquidity. And so it took longer to set that up properly, but I think we feel really confident that long-term, it's going to be a much better solution than what was currently in the market.

**Jennifer Sanasie** (2:09)
Now this is available to investors outside of the United States, obviously making US stocks available to investors who previously was much harder for them to get access to these. What are some of the benefits this unlocks for them?

**Ben Spiegelman** (2:24)
Yeah, I think when people initially think about tokenized equities, sort of like three different areas, the first one is being 24-7, right? We're on the floor here today, which is super exciting, and they are expanding to further things like 23-5 by the end of the year, but it's not there yet. And so being able to have 24-7 liquidity is super interesting. Also the ability to, as you said, offer to non-U.S. persons the ability to buy US equities.
Super exciting. And then the last one, which I think is where we think long-term, there's a ton of utility and applications is being able to leverage these stocks in DeFi. As the world comes more on chain, as people start to trade more on chain and be able to live their businesses on chain, we think that they'll be able to purchase their equities, be able to do prediction markets, all these activities, all within control of their own wallet. And so when you can do those things, you can be able to use those tokenized stocks as collateral to be able to do other activities in your life that you want to do and have one sort of encompassing portfolio. And that's what really gets us excited, right?
We haven't launched BorrowLend yet with our tokenized equities product, but it's coming very soon.

**Jennifer Sanasie** (3:26)
Give me that one killer DeFi use case that gets you really excited. When you give me that example, what's the one thing you're like, it's really awesome that people can do this now?

**Ben Spiegelman** (3:36)
Yeah. I mean, I think the one specifically will be able to borrow against your equity positions, right? A lot of people, employees, etc. that be able to actually own a lot of stock positions, which they don't want to sell for tax purposes or other areas, but they want to be able to have that liquidity to pay for things in their daily life, to be able to purchase other activities, all of those things, being able to borrow against your position, but be able to still be long the actual stock, gives people that flexibility and that freedom to be able to say, hey, I don't want to actually have to come out of my position, but I want to be able to have more utility with what I can do today with cash. And so that's super exciting in my mind.