SEC Approves Tokenized Stock Trading as Clarity Act Stalls
The U.S. Securities and Exchange Commission is pushing forward with crypto-related rulemaking after lawmakers failed to advance the Clarity Act, approving a five-year exemption for platforms that support trading in tokenized stocks.
The decision gives crypto companies a path to bring certain traditional financial assets onto the blockchain, even as Congress continues to debate how digital assets should be regulated.
SEC Opens Door to Onchain Stock Trading
The SEC announced Thursday that it had approved exemptive relief for platforms facilitating onchain secondary trading of tokenized stocks. The measure, known as the “Innovation Exemption,” allows eligible trading venues to operate under the five-year exemption.
Tokenized stocks represent traditional shares on blockchain networks. Crypto companies have increasingly sought permission to offer these assets, which could connect traditional capital markets with blockchain-based trading systems.
SEC Chairman Paul Atkins said the agency was taking action within its existing legal authority after Congress failed to move the Clarity Act forward.
“Congress was unsuccessful in advancing the Clarity Act despite the tireless efforts of many,” Atkins said in a statement.
He added that the SEC’s latest move would help bring U.S. capital markets into the digital age by supporting onchain trading of certain tokenized stocks.
Jamie Selway, director of the SEC’s Division of Trading and Markets, described the approval as an important step in the agency’s efforts to open capital markets to tokenized securities.
Regulators Continue Without New Legislation
The SEC’s decision comes days after senators blocked a procedural vote on the Clarity Act. The bill received 49 votes in favor and 50 against on Tuesday, falling short of the 60 votes needed to advance.
The legislation has been closely watched by the digital asset industry because it aims to establish clearer oversight rules for cryptocurrencies. Among its goals is defining which digital assets fall under the authority of the SEC or the Commodity Futures Trading Commission, including distinctions between securities, commodities and stablecoins.
Regulators had already indicated that they would continue using their existing powers regardless of the bill’s progress.
CFTC Chair Mike Selig said Wednesday that his agency would keep working on crypto rules despite the Senate setback. The SEC’s tokenized stock approval now adds another example of regulators moving forward without waiting for a new market structure law.
Political Dispute Adds Pressure
President Donald Trump urged lawmakers last month to pass the Clarity Act, but the Senate vote showed that the bill still faces opposition.
Republicans have accused Democrats of deliberately delaying the legislation. Some lawmakers, meanwhile, have raised concerns about Trump’s family earning money from crypto-related ventures. Trump and the White House have denied allegations of conflicts of interest.
With the Clarity Act stalled, regulators are relying on their existing statutory powers to shape parts of the digital asset market.
The SEC’s five-year exemption could provide crypto platforms with a clearer route toward tokenized stock trading while Congress continues to work on broader rules for the industry.