SEC Preparing Policy to Allow Crypto Firms to Offer Tokenized Stock Trading

The U.S. SEC, led by Chairman Paul Atkins, is preparing an "innovation exemption" policy to allow crypto firms to offer blockchain-based trading of tokenized U.S. stocks. While proponents argue 24/7 trading and instant settlement will revolutionize markets, traditional Wall Street firms like Citadel Securities oppose the ad hoc exemption, warning of systemic risks and lost liquidity. Meanwhile, the global tokenized stock market has surged past $6.4 billion, with Coinbase preparing U.S. launches.

SEC innovation exemption policy

• ▪The proposed SEC innovation exemption would temporarily allow digital asset firms to experiment with new business models without fully complying with traditional disclosure and investor-protection rules
• ▪The U.S. Securities and Exchange Commission is preparing an "innovation exemption" policy to allow crypto companies to offer blockchain-based trading of tokenized U.S. stocks

Coinbase tokenized stock launches

• ▪Coinbase announced on June 16, 2026, that it would soon launch tokenized stock products outside of the United States.
• ▪Coinbase Global Inc. plans to launch tokenized stock trading in the United States once the Securities and Exchange Commission finalizes the regulatory framework

Tokenized stock market growth

• ▪Robinhood, Kraken, and other cryptocurrency exchanges already offer tokenized stock trading in international markets outside the United States
• ▪The global market capitalization of tokenized public stocks geared toward retail investors has grown from a few million dollars at the end of 2024 to more than $6.4 billion

Traditional finance industry opposition

• ▪Citadel Securities raised concerns with the SEC in 2025 that tokenizing equities would siphon liquidity away from traditional public markets.
• ▪Citadel Securities and the Securities Industry and Financial Markets Association oppose the SEC innovation exemption, arguing structural changes should undergo formal rulemaking

Investor protection concerns

• ▪Tokenized stocks issued by third parties do not always offer investors the same voting privileges, dividend rights, disclosures, and protections as traditional equities.
• ▪SEC Commissioner Hester Peirce stated that she expects the innovation exemption would permit only tokenized stocks that confer the same rights and protections as traditional equities

Market risk warnings

• ▪Analysts and attorneys state that tokenized stock trading could bring crypto upstarts into direct competition with traditional brokerages like Charles Schwab and Morgan Stanley's E*Trade.
• ▪Regulatory experts warn that allowing crypto firms to simultaneously perform trade execution and clearing under the exemption could introduce systemic risks to financial markets.