The U.S. Securities and Exchange Commission is preparing to introduce a new regulatory framework for trading tokenized stocks, according to a Bloomberg Law report. The agency is expected to propose an “innovation exemption” that would allow trading platforms to offer blockchain-based versions of publicly traded securities under a lighter regulatory structure. The proposal could arrive as early as this week, signaling a significant shift in how equities may be issued, settled, and held.
SEC Chair Paul Atkins addressed the topic at the Economic Club of Washington, emphasizing the agency’s openness to modernizing securities infrastructure through distributed ledger technology. Atkins noted that existing securities rules do not fit blockchain-based systems that combine exchange, clearing, and settlement functions into a single protocol. He advocated for clarifying rules through regulation rather than enforcement actions, outlining potential formal rulemaking for onchain trading, blockchain settlement infrastructure, and crypto custody models.
The move aligns with deepening efforts from Wall Street. The Depository Trust & Clearing Corporation (DTCC) plans to begin limited production trades of tokenized assets in July, with a broader launch in October. Nasdaq received SEC approval in March for its own tokenized securities plan, and Intercontinental Exchange (ICE), parent of the New York Stock Exchange, announced a partnership with crypto exchange OKX to expand into tokenized stocks and crypto-linked products. These initiatives collectively aim to modernize the $126 trillion global equity market using blockchain technology.
Tokenized stocks are digital representations of equities on a blockchain, enabling near-instant settlement compared to traditional T+1 cycles. However, the framework must address custody, settlement finality, and investor protection standards. The SEC is expected to require tokenized products to carry the same reporting and transparency requirements as conventional securities. If adopted, the framework could allow crypto-native platforms to offer regulated equity products, expanding their reach beyond spot crypto trading and intensifying competition with traditional brokerages.
