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The US Securities and Exchange Commission is preparing a policy that could allow crypto companies to offer tokenized versions of publicly traded stocks. The proposed framework may open a new route for trading equities through blockchain networks.
Tokenized stocks are digital instruments linked to traditional company shares. Supporters say they could offer round-the-clock trading, faster settlement and lower transaction costs. Yet questions remain over investor rights, market oversight and the final scope of the SEC policy.
Crypto industry officials expect SEC Chair Paul Atkins to introduce an “innovation exemption” for digital asset companies. The temporary policy would let eligible firms test new services without meeting every rule that applies to registered exchanges and broker-dealers.
Atkins has described the planned exemption as “limited in time and scope.” The SEC has not released the final terms, and the regulator declined to comment on the latest reports. Therefore, it remains unclear which companies, assets and trading models would qualify.
The agency is also considering a formal rulemaking process for tokenized securities. In May, Atkins said the SEC was advancing work on an exemption for tokenized listed securities. He also said the regulator was examining how blockchain trading systems fit within current laws.
A separate safe-harbor proposal may allow some crypto firms to raise capital without following every traditional securities offering requirement. The SEC has not yet provided a final timeline for either policy.
Coinbase has indicated that it plans to launch tokenized stocks in the United States once regulations allow them. Robinhood, Kraken, and other platforms already provide similar products in markets outside the country.
The global market value of tokenized public stocks aimed at retail investors has risen above $6.4 billion. The sector was worth only several million dollars at the end of 2024, according to market data.
Under some models, issuers hold traditional shares to back tokens on a one-to-one basis. Other products use derivatives to track a stock’s price without giving token holders direct ownership of the underlying equity.
An exemption could also allow crypto firms to handle several market functions, including trade execution and clearing. Ladan Stewart, global head of fintech at White & Case, described the proposal as a ‘major victory’ for crypto companies. Still, the exact operating conditions have not been published.
Citadel Securities and the Securities Industry and Financial Markets Association oppose granting broad relief through an informal exemption. They argue that major market changes should pass through a formal rulemaking process with public review.
Citadel Securities has warned that tokenized trading could move liquidity away from established public markets. Lawyers have also questioned whether every blockchain-based product would provide voting rights, dividends, disclosures, and legal protections equal to traditional shares.
SEC Commissioner Hester Peirce has stated that “tokenized securities are still securities.” More recently, she said she expects any exemption to cover products that provide the same rights and safeguards as conventional equities.
That distinction could determine which products receive regulatory approval. Tokens issued by companies or backed by actual shares may operate differently from third-party instruments that only copy market prices.
The planned policy has not taken effect. Its final reach will depend on the SEC’s conditions, investor safeguards, and any later rules adopted through the formal regulatory process.
Also Read: Solana vs Competitors: Is SOL Winning the Tokenization Race?
