Scott Bauguess, Vice President of Global Regulatory Policy at Coinbase (NASDAQ:COIN), sees tokenization, or the digitization of securities, as benefiting Reg A and Reg C, bringing new life to these securities exemptions.
Bauguess understands these markets well, as he was previously at the Securities and Exchange Commission (SEC), where he was the Deputy Director and Acting Chief Economist of the Division of Economic and Risk Analysis (DERA). He joined Coinbase in 2022.
During a discussion at an Investor Advisory Committee (IAC) meeting on the process of tokenization and how this ecosystem will evolve, Bauguess said tokenization will solve many of the problems currently in place. He explained that onchain securities will give new life to offerings such as Reg A and crowdfunding (Reg CF).
Bauguess stated:
“The reason these exemptions have never met the promis and hope when they were issued is that the liquidity is the missing peice … Smaller issuers dont have access to liquidity on a national stock exchange. And if you issue securities on chain that have access to a DEX, all of a sudden you now have changed a market where you either have as much liquidity as you need or none. Startups will be able to find [investors], investors will be able to find new startup companies and ultimately why this should be attractive to a national stock exchange. Its going to increase the top of the funnel and incubate companies that ultimately can list on [stock exchanges].”
Bauguess declared that going onchain will give investors sovereignty over their assets.
While the utilization of online capital formation exemptions has grown, the voyage has been choppy, falling short of its potential. When you compare the liquidity of crypto markets, tokenization has the potential to boost interest, liquidity, and investment in smaller firms that use these exemptions.
That said, the process will take years, but established firms are working toward solutions to unlock the value that tokenization can create.
Regarding Coinbase, they clearly see an opportunity to provide primary offerings/access to capital for the full stack of exemptions.
Tokenization is going to reinvent finance. Everything that can be tokenized, will be. It’s much better for the end user.
Core benefits:
– Real-time settlement (eliminates counterparty risk)
– Improved liquidity/accessibility
– Higher efficiency by reducing bureaucracy/friction pic.twitter.com/73LeVOYd8m— Brian Armstrong (@brian_armstrong) December 4, 2025
