SEC Weighs Fast-Track Exemption for Tokenized Stocks Amid Industry Divide
The U.S. Securities and Exchange Commission is reportedly preparing to introduce an innovation-focused exemption that could accelerate the growth of tokenized stock trading across crypto platforms, according to sources cited by Bloomberg.
The proposed exemption, which could arrive as early as this week, would allow blockchain-based platforms to facilitate trading of tokenized versions of publicly listed equities outside traditional exchanges. However, the move has reportedly sparked disagreement within the SEC itself, with several officials said to be uneasy about the regulatory and investor protection implications.
Sources familiar with the matter said the SEC gathered input from hundreds of participants across the financial and crypto industries while shaping the framework. Regulators are reportedly considering rules requiring tokenized shares issued by third parties to mirror the rights attached to traditional equities — including dividend payments and shareholder voting powers — or risk removal from approved trading venues.
The exemption remains under discussion and could still change before any official announcement is made. SEC Commissioner Hester Peirce is reportedly leading the push to create a more flexible pathway for tokenized securities innovation.
Tokenization has become one of Wall Street’s most closely watched blockchain use cases, with supporters arguing that distributed ledger technology can reduce settlement delays, improve market efficiency, and enable around-the-clock trading.
Earlier this year, Intercontinental Exchange revealed plans to launch a blockchain-powered platform supporting continuous trading and settlement for stocks and ETFs. Meanwhile, crypto exchange Bullish expanded deeper into the sector through its $4.2 billion acquisition of transfer agent firm Equiniti.
Advocates also believe tokenized equities could broaden access to U.S. financial markets by allowing investors globally to gain exposure to major companies such as Nvidia, Google, and Tesla without relying on conventional brokerage infrastructure.
Still, skepticism remains strong within parts of the industry. Securitize President Brett Redfearn warned that allowing third parties to issue tokenized representations of stocks without direct involvement from the underlying company could create confusion around ownership and valuation.
The debate extends beyond public markets. Tokenized exposure to private firms has also grown rapidly, giving investors indirect access to high-profile startups before IPOs. But companies such as OpenAI and Anthropic have reportedly objected to unauthorized tokenized products tied to their valuations.
The SEC’s reported plans arrive shortly after the U.S. Senate Banking Committee advanced the Digital Asset Market CLARITY Act, a bill designed to establish clearer rules for the crypto industry. Several market participants, including Kevin O'Leary, have argued that traditional financial institutions are unlikely to fully embrace tokenized assets until regulatory standards around ownership, custody, and compliance are firmly established.