CoinDesk
The U.S. Securities and Exchange Commission is preparing an "innovation exemption" that would let trading platforms offer tokenized versions of publicly traded securities under a lighter regulatory structure, according to a Bloomberg Law report. The proposal could arrive as early as this week, people familiar with the matter said, and would represent one of the clearest signals yet that U.S. regulators are warming to bringing traditional equities onto blockchain rails.
SEC Chair Paul Atkins has been telegraphing the direction for weeks, telling audiences earlier in May that the agency is weighing formal rulemaking for onchain trading systems, blockchain settlement infrastructure and crypto custody models. Atkins argued existing securities rules do not fit systems that collapse exchange, clearing and settlement into a single protocol — and that the SEC should clarify the rules through regulation rather than enforcement.
Why it matters
The institutional plumbing is already moving. The Depository Trust & Clearing Corporation plans to begin limited production trades of tokenized assets in July ahead of a broader October launch, using assets already held inside its existing infrastructure. Nasdaq is developing a framework to let companies issue blockchain-based shares while preserving traditional ownership rights, a plan the SEC approved in March. Intercontinental Exchange, parent of the New York Stock Exchange, has unveiled tokenized stock and crypto-linked product plans through a partnership and investment tied to crypto exchange OKX. Together the moves point to a race to modernize the $126 trillion global equity market onchain.
Market impact
Tokenized stocks promise 24/7 trading and faster settlement than the current T+1 cycle — and could compress cross-border access for retail and institutional investors. Critics, including market-structure hawks on Capitol Hill, have warned about liquidity fragmentation and weaker investor protections if the new rails operate outside the existing National Market System rules.
Frequently asked questions
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What is the SEC's "innovation exemption" for tokenized stocks?
It's a proposed regulatory framework, reported by Bloomberg Law, that would let trading platforms offer digital versions of publicly traded securities under a lighter regulatory structure than current rules require. The proposal could arrive as early as this week.
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What did SEC Chair Paul Atkins say about tokenization?
Earlier in May, Atkins said the agency is weighing formal rulemaking for onchain trading, blockchain settlement and crypto custody, arguing existing rules don't fit systems that collapse exchange, clearing and settlement into one protocol.
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How is DTCC involved in tokenized equities?
The Depository Trust & Clearing Corporation plans to begin limited production trades of tokenized assets in July, with a broader launch in October, using assets already held inside its existing infrastructure.
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What are Nasdaq and ICE doing in tokenized stocks?
Nasdaq is building a framework to let companies issue blockchain-based shares while preserving traditional ownership rights — a plan the SEC approved in March. ICE, parent of the NYSE, has unveiled tokenized stock and crypto-linked product plans via a partnership and investment tied to crypto exchange OKX.
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What are the risks of tokenizing the equity market?
Critics warn about liquidity fragmentation and weaker investor protections if new rails operate outside the existing National Market System rules. The next 72 hours will reveal the exemption's scope, eligible platforms, and whether broker-dealers can route to tokenized venues without bespoke legal review.
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