Capital Access Wealth Creation: How Coinbase’s Revolutionary Report Exposes the True Financial Divide

In a groundbreaking revelation that challenges conventional financial wisdom, the Coinbase Institute has published a report arguing that access to capital markets, rather than traditional income or banking services, now serves as the primary determinant of wealth creation globally. Released during the World Economic Forum meetings in Davos, Switzerland, on January 15, 2025, this comprehensive analysis identifies what it terms the “brokered versus unbrokered” divide as the most significant financial inequality of our time.

Capital Access Wealth Creation: The New Financial Reality

The Coinbase Institute’s policy paper presents compelling evidence that the traditional narrative about wealth inequality requires fundamental revision. According to the report, approximately four billion individuals worldwide remain “unbrokered”—effectively excluded from direct participation in capital markets through traditional financial intermediaries. This exclusion creates what researchers describe as a “capital chasm” separating those who can build wealth through asset ownership from those limited to labor income alone.

Historical data reveals a stark divergence between capital and labor income growth. Over the past four decades in the United States, capital income has surged by 136%, while labor income has increased by only 57%. This disparity demonstrates why access to productive assets—stocks, bonds, funds, and other investment vehicles—has become increasingly crucial for long-term wealth accumulation. The report emphasizes that basic banking access, while important, no longer represents sufficient financial inclusion in modern economies.

The Brokered Versus Unbrokered Economic Divide

Traditional financial systems operate through multiple layers of intermediaries, including brokers, custodians, and clearing houses. These layers create significant economic barriers that make serving smaller investors and issuers financially impractical. Consequently, ownership of productive assets clusters heavily within advanced economies and among households already possessing brokerage relationships.

The report provides specific data illustrating this concentration. In the United States, the top 10% of families control approximately 89% of all stock holdings, while the bottom 50% own just 0.6%. This extreme concentration results from structural barriers rather than individual choices or capabilities. The existing infrastructure effectively prices out smaller participants through minimum investment requirements, complex compliance procedures, and intermediary fees that erode potential returns.

Tokenization as the Infrastructure Solution

Coinbase’s analysis argues that rebuilding core market infrastructure represents the only viable solution to bridge this capital access gap. The report specifically advocates for permissionless tokenization—the process of converting rights to assets into digital tokens on blockchain networks. Unlike permissioned blockchain models that replicate existing power dynamics with new gatekeepers, permissionless architectures function similarly to foundational internet protocols like TCP/IP.

These open systems enable anyone to build applications and services on shared rails while ensuring interoperability cannot be revoked by centralized authorities. The report contends that only through such open architectures can the unbrokered majority gain meaningful access to capital markets. Tokenization reduces transaction costs, eliminates unnecessary intermediaries, and enables fractional ownership of assets previously inaccessible to smaller investors.

Real-World Tokenization Implementation Examples

Tokenization has already progressed from theoretical concept to practical implementation across both cryptocurrency and traditional finance sectors. Several prominent institutions have launched production systems demonstrating the technology’s potential:

• Franklin Templeton’s On-Chain Fund: The investment giant now issues tokenized shares of its U.S. money market fund on public blockchains. These on-chain fund units settle faster than traditional alternatives while remaining fully compliant with existing securities regulations.
• JPMorgan’s Tokenized Collateral Network: Operating on the bank’s proprietary Kinetics platform, this system uses blockchain-based tokens representing assets like money market fund shares to facilitate collateral movement between institutional clients with unprecedented efficiency.
• New York Stock Exchange’s 24/7 Trading Venue: Announced on January 13, 2025, this initiative will create a continuous trading platform for tokenized stocks and exchange-traded funds (ETFs) featuring blockchain-based post-trade infrastructure and stablecoin settlement mechanisms.

These implementations demonstrate that tokenization delivers tangible benefits even within regulated financial environments. Faster settlement times, reduced counterparty risk, and enhanced liquidity represent just some advantages already being realized by early adopters.

Global Implications and Regulatory Considerations

The Coinbase Institute report arrives during a period of significant regulatory evolution worldwide. Bermuda recently announced a partnership with Coinbase and Circle to develop what it terms a “fully onchain” economy. Meanwhile, financial institutions like Sygnum Bank predict that tokenization and state Bitcoin reserves will experience substantial growth through 2026.

Coinbase CEO Brian Armstrong emphasized during World Economic Forum discussions that updated financial systems must prioritize economic freedom alongside efficiency and inclusion. His advocacy for market structure legislation reflects the cryptocurrency industry’s growing engagement with policymakers to create frameworks supporting innovation while maintaining investor protection.

The report acknowledges that successful implementation requires addressing legitimate concerns about investor protection, market integrity, and financial stability. However, researchers argue that well-designed regulatory frameworks can mitigate these risks while preserving the accessibility benefits of permissionless systems. The alternative—maintaining the status quo—would perpetuate existing inequalities and limit economic growth potential globally.

Conclusion

The Coinbase Institute’s comprehensive analysis fundamentally reframes our understanding of wealth creation in the 21st century. Capital access, rather than income alone, now determines who can build meaningful wealth through productive asset ownership. Tokenization, particularly through permissionless blockchain architectures, offers a viable pathway to bridge the divide between the brokered minority and unbrokered majority. As financial institutions increasingly adopt this technology, the potential exists to transform global capital markets into more inclusive, efficient, and accessible systems that serve billions currently excluded from wealth-building opportunities. The capital access wealth creation paradigm represents not merely a technological shift but a fundamental reimagining of financial inclusion for the digital age.

FAQs

Q1: What does “brokered versus unbrokered” mean in the Coinbase report?
The report uses these terms to distinguish between people who have direct access to capital markets through financial intermediaries (brokered) and those who don’t (unbrokered). Approximately four billion people globally fall into the unbrokered category, limiting their wealth-building opportunities.

Q2: How does tokenization improve capital access?
Tokenization converts asset rights into digital tokens on blockchain networks, enabling fractional ownership, reducing transaction costs, eliminating unnecessary intermediaries, and allowing smaller investors to access assets previously requiring substantial minimum investments.

Q3: What’s the difference between permissioned and permissionless tokenization?
Permissioned tokenization uses closed blockchain systems where gatekeepers control access, often replicating existing power structures. Permissionless tokenization uses open architectures where anyone can participate, similar to how the internet’s foundational protocols work.

Q4: Are traditional financial institutions adopting tokenization?
Yes, major institutions including Franklin Templeton, JPMorgan, and the New York Stock Exchange have already implemented tokenization systems for funds, collateral management, and trading venues, demonstrating practical applications within regulated environments.

Q5: How does capital income growth compare to labor income growth?
According to the report, capital income in the United States grew 136% over the past 40 years, while labor income increased only 57%. This divergence explains why access to capital markets has become increasingly crucial for wealth creation.