Investing.com -- A new U.S. regulatory framework for digital assets is likely to fundamentally reshape the competitive positioning of platforms like Robinhood (NASDAQ:HOOD) and Coinbase (NASDAQ:COIN).
Analysts at Bernstein in a note flagged the emerging contours of this framework and its implications for the two firms.
The upcoming legislation aims to clarify the status of crypto assets by splitting oversight between the SEC and the CFTC.
Under the proposed structure, the SEC would regulate crypto asset securities, while the CFTC would oversee commodities like Bitcoin and Ethereum.
Significantly, the framework could create a new regulatory category, similar to the existing Alternate Trading System (ATS), which allows platforms to operate without registering as national securities exchanges.
This shift is expected to ease the compliance burden by moving from a state-by-state licensing model to a streamlined federal regime.
For Robinhood, which currently operates as a broker-dealer, this change could dramatically expand its crypto offerings.
At present, Robinhood limits itself to listing major tokens it deems not to be securities, primarily Bitcoin, Ethereum, Solana, and meme tokens like Dogecoin.
The regulatory ambiguity has kept it from offering thousands of other digital assets that may have security-like characteristics or are tokenized versions of traditional securities.
With greater legal clarity, Robinhood could begin listing tokenized equities and crypto asset securities, potentially unlocking a far larger market.
This would allow it to build integrated marketplaces that trade not just crypto and equities, but also prediction markets and other emerging asset classes.
Coinbase, which operates as a crypto exchange with multiple state money-transfer licenses, stands to benefit from the consolidation of licensing requirements at the federal level.
It currently lists about 250 assets, adopting a cautious approach to avoid regulatory scrutiny. This conservative stance has left Coinbase at a disadvantage compared to international rivals like Binance, which list a broader range of tokens and have captured the majority of global trading volume.
With the new framework, Coinbase could be designated as an alternate trading platform, giving it the ability to list both crypto securities and non-securities without the patchwork of state-level licenses.
This would level the playing field, allowing it to compete more aggressively with offshore exchanges.
The potential to list token-linked futures contracts and tokenized equities also opens up new revenue streams for the platform.
According to Bernstein, the new rules could redefine the boundaries between traditional and digital financial products.
The brokerage notes that current structural separation is largely the product of outdated regulations, not a reflection of user demand. In fact, the same younger demographic trades both equities and crypto.
The changes would allow platforms like Robinhood and Coinbase to operate more efficiently, with integrated back-office systems and potentially lower costs, thanks to the efficiencies enabled by blockchain technology.