SEC Greenlights Tokenized Stock Trading, Eyes Market Launch Next Quarter

The U.S. Securities and Exchange Commission (SEC) has given the green light for tokenized stock trading, paving the way for a new market that could emerge as early as next quarter.

Under the Innovation Exemption, eligible platforms can trade tokenized versions of U.S.-listed stocks on public blockchains using automated market makers and liquidity pools.

The exemption has already taken effect, with operators required to publicly release a notice explaining how their business will operate and notify the SEC within one business day after making that disclosure.

According to Taylor Lindeman, senior adviser to the SEC's crypto task force, companies involved are likely to announce plans for tokenized stock trading businesses in the coming months.