The U.S. Securities and Exchange Commission is preparing an "innovation exemption" to allow tokenized stock trading on decentralized crypto platforms. Led by Commissioner Hester Peirce, the proposal permits third-party tokens to track public equities without company consent, though the SEC may mandate voting and dividend rights. Meanwhile, Wall Street giants like DTCC and Nasdaq advance their own blockchain settlement systems as the tokenized equity market reaches $1.4 billion.
SEC tokenized securities exemption
- ▪The U.S. Securities and Exchange Commission is preparing an "innovation exemption" to allow blockchain-based trading of tokenized public company shares on decentralized platforms
- ▪The U.S. Senate Banking Committee advanced the CLARITY Act in May 2026 to help establish a regulatory framework for digital assets and tokenization
- ▪SEC Chair Paul Atkins signaled in May 2026 that the agency is considering formal rulemaking to accommodate on-chain trading systems and blockchain settlement infrastructure
- ▪SEC Commissioner Hester Peirce reportedly led the agency's push to establish the innovation exemption for tokenized stock trading
Third-party stock tokenization
- ▪The proposed SEC framework would allow third parties to issue and trade digital tokens tracking public company share prices without the consent of the underlying companies
- ▪Securitize president Brett Redfearn warned that tokenizing stocks without issuer consent could cause market fragmentation and leave investors uncertain of share values
- ▪Companies including OpenAI and Anthropic have opposed unauthorized tokenized stocks tracking their respective private valuations in the pre-IPO market
Wall Street blockchain infrastructure
- ▪Crypto exchange Bullish acquired transfer agent platform Equiniti for $4.2 billion in May 2026 to strengthen its tokenization capabilities
- ▪The SEC approved Nasdaq's tokenized securities framework in March 2026, allowing companies to issue blockchain-based shares while preserving traditional ownership rights
- ▪Intercontinental Exchange, the parent company of the New York Stock Exchange, partnered with crypto exchange OKX to develop a platform for 24/7 tokenized stock trading
- ▪The Depository Trust & Clearing Corporation plans to launch limited production trades of tokenized assets in July 2026, ahead of a broader rollout in October 2026
Shareholder rights concerns
- ▪Critics of tokenized stock trading warn that the absence of traditional shareholder rights and company consent could weaken investor protections and price discovery
- ▪The SEC reportedly proposed that third-party tokenized stocks must carry traditional benefits like voting rights and dividends or risk being delisted from trading platforms
Tokenized asset market growth
- ▪Data from RWA.xyz indicates that the tokenized real-world asset market reached $33.7 billion in on-chain distributed asset value as of May 17, 2026
- ▪According to RWA.xyz, the tokenized equities sector holds $1.4 billion in distributed value, representing a 30% increase over a 30-day period ending in May 2026
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