Ethereum Surges 5.8% as SEC Permits Token-Based Trading

The US Securities and Exchange Commission (SEC) has taken a step towards permitting token-based trading of stock-type securities, allowing a new class of venues to trade blockchain versions of regularly listed stocks without registering as a stock exchange.

This 'Innovation Exemption' is temporary, capped, and comes with strings attached. It's essentially a placeholder for further announcements and is meant to be a bridge to actual rulemaking.

The SEC requires that smart contracts used by these venues run on a public, permissionless distributed ledger. Ethereum is the clear leader in this space, making it a promising but unproven idea for tokenized stock trading.