- The SEC may launch an “innovation exemption” this week to allow tokenized stock trading.
- Reports say third parties could issue blockchain-based stock tokens without approval.
- Wall Street firms like DTCC, Nasdaq, and ICE are already building tokenized securities rails.
The US Securities and Exchange Commission is preparing a new “innovation exemption” framework that could open the door for tokenized stock trading on crypto platforms, according to reports.
The proposal could arrive as soon as this week. It would allow blockchain-based versions of publicly traded stocks to trade under a lighter regulatory structure.
The framework is part of a broader push by the Trump administration to move parts of the financial system onto crypto rails.
According to Bloomberg, the SEC is leaning toward allowing third parties to issue tokenized versions of stocks without approval from the public companies tied to those shares. These tokens could trade on decentralized finance platforms instead of traditional stock exchanges.
SEC Moves Toward Tokenized Markets
The proposal is reportedly a “surprise move” from the SEC, with the regulator preparing to allow tokenized assets to trade on decentralized crypto platforms.
The framework may also permit DeFi platforms to list tokenized stocks issued by third parties. However, platforms could lose eligibility for the exemption if their products fail to provide investors with shareholder rights, such as voting rights or dividends.
Sources also reported that some of the tokenized products under discussion may not include traditional shareholder protections. This creates a major distinction between owning a stock directly through a broker and holding a blockchain-based token linked to that stock.
The SEC has not publicly released the final structure of the exemption.
Wall Street Expands Into Blockchain Infrastructure
Large financial firms have already started building systems around tokenized securities.
The Depository Trust & Clearing Corporation, which handles clearing and settlement across much of the US stock market, plans to begin limited production trades for tokenized assets in July before a wider rollout in October.
The system will support tokenized stocks and ETFs backed by assets already held inside the DTCC infrastructure.
Nasdaq is also developing a framework that would allow companies to issue blockchain-based shares while keeping traditional ownership structures intact. The SEC approved Nasdaq’s tokenized securities plan in March.
Meanwhile, Intercontinental Exchange, the parent company of the New York Stock Exchange, has expanded its tokenized asset plans through a partnership tied to crypto exchange OKX.
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