SEC Clears Path for Tokenized Stock Trading on Public Blockchains
The U.S. Securities and Exchange Commission (SEC) has opened a regulated pathway for trading tokenized versions of American stocks on public blockchains, marking a significant development in the crypto space.
According to Taylor Lindman, chief counsel of the SEC's Crypto Task Force, qualifying platforms could begin taking shape next quarter, with companies expected to file formal notices and unveil operational plans in the coming months.
The exemption, dubbed the 'Innovation Exemption,' grants a five-year relief window from having to register as a formal stock exchange for Tokenized Securities Venues (TSV), which let investors trade blockchain-based versions of shares already listed on U.S. exchanges.
Under the exemption, TSVs must operate as a U.S. entity and comply with sanctions rules enforced by the Treasury's Office of Foreign Assets Control. Access to trading must be permissioned, even though the tokens sit on public blockchains.