SEC Clears Path for Tokenized Stocks, Enabling 24/7 Trading

The U.S. Securities and Exchange Commission (SEC) has issued an order allowing certain trading platforms to issue tokenized representations of publicly traded U.S. stocks, effective immediately.

This regulatory pathway is part of the agency's 'Project Crypto' initiative to bring America's financial markets onchain.

The so-called Innovation Exemption provides trading venues and liquidity providers with the necessary relief to facilitate tokenized stock trading, but only if they meet certain conditions.

Holders of stock tokens must retain the same rights as traditional equity holders, including voting rights, and companies can object to having their securities represented as tokens.