SEC Flips Switch on Tokenized Stocks After CLARITY Act Fails

United States crypto legislation is in jeopardy after the Senate voted down the CLARITY Act, but the Securities and Exchange Commission (SEC) has opened the floodgates for blockchain-based tokenized stock trades.

The SEC's Paul Atkins announced the 'innovation exemption' plan, which will allow digital asset platforms to offer tokenized versions of publicly traded stocks on a 24/7 basis. This exemption starts now and will expire five years from now.

Tokenized Securities Venues (TSV) must ensure that tokenized equities offer holders the same rights and privileges as traditional stock, and trading must halt if halted on primary exchanges.