The Securities and Exchange Commission is preparing to launch a framework for trading tokenized versions of popular Wall Street-listed stocks, according to a report published on Monday.
‘Innovation Exemption’ Out Soon?
The agency is expected to release its new “innovation exemption” for the blockchain version of stocks as early as this week. Bloomberg reported, citing people familiar with the matter.
The SEC didn’t immediately return Benzinga’s request for comment.
Increased Momentum For Tokenization In US
SEC Chair Paul Atkins first hinted at the so-called “innovation exemption” in April. The proposal aims to give qualified firms a regulatory sandbox, a limited window to issue and trade tokenized securities on-chain under lighter-touch compliance conditions, while still operating under SEC oversight.
A tokenized security is a traditional financial asset— a stock, bond, or fund share represented as a digital token on a blockchain. The token provides the same legal ownership rights as its traditional counterpart, while offering the benefits of being programmable, divisible and capable of near-instant settlement.
Currently, tokenized equities are not available for trading in the U.S., but firms are experimenting with the concept.
Robinhood Markets Inc. (NASDAQ:HOOD) launched tokenized stocks for its European customers last year, featuring high-profile private company equities, including OpenAI and SpaceX.
The SEC approved a rule change in March that would allow Nasdaq to support the trading of tokenized shares on the exchange.
The New York Stock Exchange is already developing a platform for the trade and on-chain settlement of tokenized U.S.-listed stocks and exchange-traded funds, offering 24/7 operations and instant settlement.
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