SEC Grants Tokenized Stock Trading Exemption Amid Crypto Adoption Push

The US Securities and Exchange Commission (SEC) has introduced an 'Innovation Exemption' that allows certain tokenized stocks to trade directly onchain. This move comes after Congress failed to pass the CLARITY Act, despite months of negotiation.

The exemption is meant as a bridge, not a permanent fix, while regulators work on more formal rules for tokenized securities. It expires after five years and has several strict conditions, including that trading venues must be US-based entities with cleared traders.

The SEC says this is part of a broader effort to keep the US competitive in building next-generation financial infrastructure. The agency framed the move as a way to spur crypto adoption and let decentralized exchanges (DEXs) and centralized exchanges (CEXs) experiment with tokenized securities.