Coinbase is on track to operate a regulated broker-dealer, pending approval by federal authorities.

If approved, the US-based digital currency exchange will soon be capable of offering blockchain-based securities, under the oversight of the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

This step is being made possible by the acquisition of a broker-dealer license, an alternative trading system license and a registered investment advisor license.

Asiff Hirji, president and chief operating officer, noted that there are now many types of blockchain-based digital assets, from cryptocurrencies to security tokens and collectibles. In the US, some of these assets will be subject to SEC oversight.

“With this in mind, securing these licenses will bring us a step closer to our goal, which is to be the most trusted way for our customers to buy, sell, and use many different types of crypto assets,” he stated.

Coinbase recently announced a suite of institutional products, which it described as another indication of the maturation of the crypto economy. The move was enabled by the acquisition of Keystone Capital, Venovate Marketplace, and Digital Wealth.

“Ultimately, we can envision a world where we may even work with regulators to tokenise existing types of securities, bringing to this space the benefits of cryptocurrency-based markets - like 24/7 trading, real-time settlement, and chain-of-title,” added Hirji.

The move comes as SEC head Jay Clayton told CNBC that the agency will not change its rules for cryptocurrency when it comes to defining what is or what is not a security.

"We are not going to do any violence to the traditional definition of a security that has worked for a long time, we've been doing this a long time, so there's no need to change the definition,” he stated, adding that there were also no plans to make adjustments for initial coin offerings (ICOs).

“If you have an ICO or a stock, and you want to sell it in a private placement, follow the private placement rules,” Clayton said. “If you want to do any IPO with a token, come see us.”

A panel of experts speaking at the Money 20/20 Europe conference earlier this week agreed that further regulation was required for the cryptocurrency industry to gain mainstream acceptance, something which was unlikely until agreement was reached on how the emerging asset class should be viewed – currency, commodity, utility or security.

Clayton stated that cryptocurrencies are replacements for sovereign currencies, and therefore not a security. However, a token, or a digital assets used in ICO fundraising, are securities by his definition.

“A token, a digital asset, where I give you my money and you go off and make a venture, and in return for giving you my money I say 'you can get a return' that is a security and we regulate that,” he said, adding: “We regulate the offering of that security and regulate the trading of that security.”

Whether an asset is a security currently follows the Howey Test, from a 1946 Supreme Court case that classifies it as an investment of money in a common enterprise, in which the investor expects profits primarily from others’ efforts.

Nigel Green, founder and chief executive of deVere Group, said the SEC’s approach on Bitcoin and other cryptocurrencies shows the sector is increasingly mainstream.

“This clarification by the SEC removes some of the uncertainty that has been swirling around the crypto sector and serves to strengthen the overall proposition of many of the major cryptocurrencies,” he commented.

“It’s my view that some form of regulation of cryptocurrencies - which I believe are the future of money - is now becoming inevitable,” added Green. “This has been noted by the Head of the IMF and can also be evidenced by the July deadline for suggested cryptocurrency regulation set at the G20 summit earlier this year.”

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