Encryption super application revolution: When Coinbase breaks down financial boundaries

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Original author: Nishil Jain

Original Compilation: Luffy, Foresight News

Last week, Coinbase launched a brand new product called “Financial Future.” One application can realize five major functions: 5×24 hour stock trading, centralized exchange and on-chain cryptocurrency trading, futures and perpetual contract trading, prediction markets, and it is equipped with an AI financial analyst. All functions can be operated through mobile phones, and users can instantly switch their single account balance between different asset classes.

Not long ago, Robinhood took the lead by launching tokenized stock trading in Europe, 5×24 hour futures trading, cryptocurrency interest services, and plans to launch a social trading feature called Robinhood Social in 2026.

The mainstream discourse on platform X interprets this trend as the evolution of “super applications”, but people overlook a key point: this is not simply a layering of functions, but rather a breaking down of the artificially delineated boundaries of financial asset categories due to regulatory and technological constraints.

Why is the financial application sector experiencing a wave of integration after ten years of fragmented development? What does this mean for users and platforms involved? Next, we will officially dive into the topic.

Fragmentation pain points

Over the past decade, fintech applications have emerged one after another, but most only cover a single aspect of financial services, with functions such as stock trading, cryptocurrency, payments, and savings dispersed across different applications.

This model, while providing users with more choices, also allows companies to focus on refining a single solution, but it is fraught with problems in practical use.

Want to sell stocks and then buy cryptocurrencies? Stock trading needs to be executed on Monday and can only complete T+1 settlement on Tuesday; then initiate a withdrawal, which takes 2-3 days for the funds to arrive in the bank account; transferring the funds to Coinbase takes another 1-2 days. From “deciding to adjust the asset allocation” to “the funds actually landing,” the entire process takes about 5 days. During these 5 days, the investment opportunities you were originally eyeing may have already disappeared, while the funds are stuck in a cumbersome process.

For example, if you want to buy Bitcoin at a price of $86,000 on December 18, but due to processing delays, you end up buying it at a price of $90,000 five days later. For more volatile investment opportunities like meme coins, initial coin offerings (ICO), or initial public offerings (IPO), the losses caused by such delays can be even more severe.

The problem of fragmentation exists not only in a single region. An Indian investor wishing to purchase Nvidia stocks must repeatedly complete multiple KYC verifications, open an account with a broker that supports Indian users investing in US stocks, and also deposit additional funds, all just to buy this one stock.

We have all experienced this operational friction, but it is only recently that the infrastructure capable of addressing this issue has gradually taken shape.

The Cornerstone of Transformation: Improvement of Infrastructure

The three major structural changes have made the birth of an integrated financial platform possible.

Tokenization breaks down time barriers

Traditional stocks can only be traded during the trading hours of the New York Stock Exchange (NYSE) (from 9:30 AM to 4:00 PM Eastern Time, 5 days a week), while cryptocurrencies enable 24/7 uninterrupted trading. By implementing tokenization of stocks on a Layer 2 network, it proves that with reasonable technological mechanisms, stocks can theoretically achieve round-the-clock trading.

Now, Robinhood's tokenized stocks launched in Europe support 5×24 hour trading, and Coinbase will follow this model.

The regulatory framework is becoming clearer.

In recent years, Bitcoin spot ETFs have successfully listed, the legalization process of stablecoins has advanced, and the regulatory framework for tokenization has entered the review stage. The prediction market has also received approval from the U.S. Commodity Futures Trading Commission (CFTC). Although the regulatory environment is not perfect, it is clear enough for platforms to confidently develop multi-asset products without worrying about being completely halted.

The infrastructure of mobile wallets is mature.

Embedded wallets can now seamlessly handle complex cross-chain operations. The Privy platform, acquired by Stripe, allows users to create wallets using their existing email addresses without needing to deal with mnemonic phrases; the recently launched cryptocurrency trading app Fomo enables non-cryptocurrency users to trade Ethereum, Solana, Base, Arbitrum, and other on-chain tokens without manually selecting networks, and also supports Apple Pay deposits, with the backend automatically handling all complex processes, allowing users to simply click 'Buy Tokens' to complete the operation.

The core logic of liquidity integration

The core driving force behind this transformation is: the funds dispersed across different applications are essentially idle funds.

In an integrated model, users only need to hold one account balance: after selling stocks, the funds can be instantly used to purchase cryptocurrencies, without waiting for settlement windows, withdrawal review periods, or going through intermediaries like banks. The originally 5-day opportunity cost completely disappears.

Platforms that integrate liquidity excel in efficiency. With deeper liquidity pools, they can offer better execution speed; because all trading pairs share the same underlying liquidity, they can support more trading pairs; they can provide returns on idle capital like banks; moreover, with reduced friction and increased user trading volume, they can also earn more fee income.

Coinbase Integration Blueprint

Coinbase is the most typical case in this wave of financial integration. Founded in 2012, the company initially started as a simple cryptocurrency exchange, supporting only the buying and selling of Bitcoin and Ethereum. In the following years, Coinbase gradually added institutional custody, staking services, and crypto lending interest products, and by 2021 had evolved into a full-service cryptocurrency platform.

Its expansion has not stopped: it launched the Coinbase Card supporting cryptocurrency spending, the merchant payment solution Coinbase Commerce, and created its own Layer 2 blockchain Base.

The new product launch on December 17 marks the full realization of Coinbase's “super app” vision. Now, Coinbase supports 24-hour stock trading and plans to launch Coinbase Tokenize, a tokenization service for real-world assets aimed at institutions, early next year. This will be integrated with prediction markets through a partnership with Kalshi, providing futures and perpetual contract trading, and incorporating decentralized exchange trading functions from the Solana ecosystem within the app. Additionally, the Base app has expanded to 140 countries and enhanced the social trading experience.

Coinbase is gradually becoming the operating system for on-chain finance. With a single interface and a single account balance covering the trading needs of all asset classes, its goal is to allow users to complete all financial operations without leaving the platform.

Robinhood is also following a similar development path: starting with commission-free stock trading, gradually adding cryptocurrency trading, offering a gold subscription service with 3% cash back and 3.5% deposit interest, futures trading, and then launching tokenized stocks in Europe.

Both platforms are betting on the same core logic: users do not want to download different applications for stocks, cryptocurrencies, and derivatives. What they need is a single account balance, a unified interface, and the ability to adjust fund configurations in real-time.

Social Trading: Emerging Differentiated Competitiveness

Asset integration has solved the liquidity problem, but it has not addressed the issue of asset discovery for users.

When there are millions of assets available in the market, how should users filter trading targets? How should they construct their own investment portfolios?

This is precisely where the value of social features lies. Coinbase's Base app has a built-in dynamic information stream, allowing users to view others' buying actions; Robinhood plans to launch Robinhood Social in 2026; eToro has offered social trading features since 2007, paying copy traders 1.5% of the assets they hold as a commission.

A number of applications exploring social trading features have also emerged in the on-chain space, such as Fomo, 0xPPL, and Farcaster. These applications allow users to view their friends' investment targets, follow them, and copy their trading actions.

Fomo's leaderboard page

Social trading allows users to view the trading behavior of others in real-time and copy it with one click. This significantly reduces decision friction: there is no need for independent research, just follow the trading strategies of those you trust. Once the platform forms a stable community ecosystem — users follow trading experts and build personal reputations — it becomes difficult for users to migrate to other platforms, which creates a strong competitive barrier and user stickiness for trading applications.

Centralized exchanges launched the copy trading feature in 2022, but its usage rate has remained below 2%. Mobile application platforms bet on increasing the popularity of this feature by optimizing user experience. Whether their judgment is correct will determine whether social trading can become a true differentiating competitive edge or merely another ordinary feature.

Pessimistic Perspective: Potential Risks and Controversies

Let's face the reality honestly: the original intention of cryptocurrency was to achieve financial decentralization, eliminate intermediaries, and allow users to have control over their own assets.

And now, we are rebuilding centralized platforms: Coinbase controls asset custody, trade execution, and social relationship chains; Robinhood holds the private keys of embedded wallets; users need to trust that the platform has solvency, security, and the ability to operate continuously. Behind all of this lies counterparty risk.

Robinhood's tokenized stocks are essentially derivatives that track stock prices rather than actual stocks. Once the platform goes down, what users hold is merely a promissory note.

The problems brought by gamification are becoming increasingly serious: 24/7 trading means you might make impulsive trades at 3 AM when emotions run high; social information streams can trigger FOMO when you see others making profits; push notifications remind you of every market fluctuation in real time. This is essentially scaled casino psychology, meticulously optimized by designers who understand how to trigger dopamine responses.

Is this truly a progress in the democratization of finance, or just a new form of exploitation under a different guise? This is a philosophical question worth pondering.

The essence behind the phenomenon

We spent ten years dismantling financial services, with the assumption that fragmentation could foster competition and bring more options.

But it has been proven that fragmentation also leads to inefficiency: idle funds, dispersed liquidity, and users are forced to hold more idle funds due to cumbersome fund transfer processes. The new era is changing this situation.

Coinbase and Robinhood are gradually becoming new types of banks: they control your salary, savings, investment, and spending patterns, manage trade execution, asset custody, and access rights, intervening in every transaction. The only difference compared to traditional banks is that their user interface is more visually appealing, the trading market is open 24/7, and deposit rates are 50 basis points higher.

Whether we are achieving financial democratization by lowering barriers and improving efficiency, or merely replacing the gatekeepers while maintaining the barriers themselves, the era of fragmentation has ended. In the coming years, we will witness whether financial integration based on open underlying technologies can bring better results than the traditional banks we once fled from, or if it is simply a change of the logo that locks in users.