SEC Greenlights Tokenization of Stocks in America

The US Securities and Exchange Commission (SEC) has announced an Innovation Exemption for tokenized stocks, allowing certain venues to trade onchain without registering as a securities exchange.

Tokenization is set to become a reality in America, according to Robinhood's Vlad Tenev. The news sent shockwaves through the market, with Bitcoin and Ethereum surging over 10% and Uniswap's UNI token gaining more than 30% in the days following the announcement.

However, not all tokenized stocks will fit within the new rules. Tokens must provide holders with the same rights and privileges as the underlying shares, including dividends and voting rights. If a token does not meet these conditions, it is classified as synthetic stock, which is non-compliant.

Coinbase's stock tokens are seen as being closest to the SEC's model, but they currently only apply to non-US customers and use a central limit order book infrastructure. Ondo Finance has also already launched tokenized US securities with custodial entitlement-based rights, aligning with the SEC's requirements.