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SEC Prepares to Allow Trading Tokenized Stocks on Crypto Platforms
TL;DR
The SEC is preparing to allow trading of tokenized stocks on crypto platforms through an upcoming 'innovation exemption.' This move could significantly alter the American stock market landscape.
Key points
- SEC to release innovation exemption for tokenized stocks
- Trading of tokenized stocks on decentralized platforms
- Potential impact on the American stock market landscape
- Tokens may lack traditional shareholder rights
- Framework expected to be finalized this week
The SEC is set to release a so-called “innovation exemption” for tokenized stocks, which will pave the way for trading digital versions of securities, reported Bloomberg on Tuesday.
The agency’s framework for tokenized stock trading under the Trump administration’s direction is expected to be finalized this week, the anonymous sources told the outlet. These tokenized assets would also be tradeable on decentralized crypto platforms in a move that could “reshape the landscape of the American stock market,” it reported.
Huge Shift in US Crypto Infrastructure
Under Chair Paul Atkins, the SEC has signaled support for tokenization since mid-2025, including exemptions to accelerate on-chain securities trading, aligning with broader US policy to lead in digital assets.
The SEC is leaning toward allowing trading of tokens that do not have the backing or consent of the public companies whose shares they track, reported Reuters. These tokens may not provide traditional shareholder rights, such as voting power or dividends, the report added.
The move could be one of the biggest shifts into crypto infrastructure yet, paving the way for 24/7 trading of digital securities, potential DeFi integration for equities, and growth in platforms handling tokenized assets.
DeFi analyst Ignas said it was bullish for multiple assets, including ONDO, CFG, PENDLE, and HYPE, as well as lending markets that accept tokenized collateral, such as AAVE, MORPHO, and FLUID. Tokenization is shifting from plans to policy in a structural shift that will enable round-the-clock trading and decentralized rails.
“We’ve entered a global race to tokenize money and capital markets,” commented Token Terminal.
“The economic advantages of asset tokenization are too good to ignore, which is why we believe that all other major nations and economic zones will try to follow the US playbook when it comes to stablecoins and asset tokenization.”
Tokenized Stocks Remain Small
Tokenized stocks comprise a small piece of the larger tokenized real-world asset pie with just $1.45 billion, or 4.3% share of distributed TVL, according to RWA.xyz.
Tokenized US Treasuries make up the lion’s share with 46% of $15.5 billion, and Ethereum is the blockchain of with a market share exceeding 60% (including layer-2s) of all tokenized RWA.
Q&A
What is the SEC's innovation exemption for tokenized stocks?
The SEC's innovation exemption will enable the trading of digital versions of securities, facilitating tokenized stock trading on crypto platforms.
How will tokenized stocks affect traditional shareholder rights?
Tokenized stocks may not offer traditional shareholder rights, such as voting power or dividends, as they could be traded without the backing of the public companies they represent.
When is the SEC expected to finalize its framework for tokenized stock trading?
The SEC is expected to finalize its framework for tokenized stock trading this week, as reported by Bloomberg.
