The U.S. Securities and Exchange Commission has reportedly prepared an “innovation exemption” that could allow blockchain platforms to offer tokenized versions of publicly traded stocks, including tokens issued without direct approval from the underlying companies.
Summary
- The SEC is reportedly preparing an exemption that could allow tokenized trading of public company shares on blockchain platforms.
- Bloomberg reported that the proposal may require tokenized stocks to carry the same rights as traditional shares, including dividends and voting access.
Bloomberg reported on Monday, citing people familiar with the discussions, that the exemption could be introduced as early as this week as the agency explores ways to expand tokenized securities trading beyond conventional stock exchanges and into crypto-based markets.
Under the proposal, the SEC has discussed rules that would require tokenized shares issued by third parties to provide the same rights attached to traditional common stock, including voting privileges and dividend access. Sources cited in the report said tokens that fail to meet those standards could face delisting requirements.
People familiar with the matter also told the media outlet that SEC Commissioner Hester Peirce has played a central role in advancing the exemption effort, although the report noted that final details are still being negotiated and could change before any formal announcement.
Wall Street firms are pushing tokenization plans
Across the financial industry, tokenization has gained traction as firms explore blockchain systems that could support round-the-clock trading and faster settlement processes.
Earlier this year, Intercontinental Exchange, the parent company of the New York Stock Exchange, said it was preparing a blockchain-based platform designed for 24/7 trading and settlement of stocks and exchange-traded funds. The company described the project as part of its effort to modernize post-trade infrastructure using distributed ledger technology.
Elsewhere in the sector, crypto exchange Bullish strengthened its tokenization business earlier this month after acquiring transfer agent platform Equiniti in a $4.2 billion deal. Bullish is led by former NYSE president Tom Farley.
Supporters of tokenized equities have argued that blockchain-based shares could allow investors outside the United States, or users without access to traditional brokerage services, to gain exposure to public companies such as Nvidia, Google, and Tesla through crypto platforms.
Concerns emerge over issuer involvement
Even as the SEC considers the exemption, Bloomberg reported that some officials inside the agency remain opposed to allowing tokenized stock trading without direct issuer participation.
“If third parties can tokenize Apple or Amazon without the issuer at the table, there’s no theoretical limit on how many wrappers of the same company exist at once. This could create a whole new level of market fragmentation and could leave investors less certain what their shares are actually worth at any moment,” Brett Redfearn, president of crypto-native tokenization platforms, Securitize, said in a comment.
Tokenized investing has also expanded into private markets, where blockchain platforms have started offering exposure to high-profile startups before public listings.
Several companies tied to those offerings have already objected to the practice. According to previous public statements, both OpenAI and Anthropic have opposed unauthorized tokenized products linked to their valuations.
The SEC’s reported discussions around tokenized securities have surfaced only days after the Senate Banking Committee advanced the CLARITY Act, legislation that would establish a federal framework for parts of the digital asset market before heading to a Senate floor vote next month.
