SEC Grants Blockchain-Based Stock Trading Platforms Five-Year Regulatory Exemption

The U.S. Securities and Exchange Commission (SEC) has issued a long-awaited regulatory exemption that clears the way for blockchain-based trading platforms to facilitate tokenized versions of equities and other securities.

Under the new framework, these trading platforms will receive a five-year reprieve from many of the rules governing established exchanges like Nasdaq and the New York Stock Exchange. Liquidity providers in these tokenized assets are also granted a five-year exemption from dealer registration requirements.

The order, which takes effect immediately, includes several conditions designed to protect issuers and investors. Venues must notify companies 30 days before listing tokenized versions of their shares, and they are barred from offering such products if the issuer objects.

Tokenized stocks permitted under the exemption will not be structured as derivatives and will carry the same rights and privileges as the underlying shares, including dividends and voting rights. The move is seen as a significant step toward integrating digital asset infrastructure with the roughly $75 trillion U.S. stock market.