SEC Greenlights Tokenized US Stock Trading on On-Chain Venues

The US Securities and Exchange Commission (SEC) has granted a temporary exemption for tokenized US stock trading. This exemption will allow certain on-chain venues to offer permissioned trading of tokenized National Market System (NMS) stocks.

Under the innovation exemption, Tokenized Securities Venues (TSVs) can engage in automated market maker and liquidity pool trading. However, these trades must adhere to specific requirements, including transaction transparency, recordkeeping, and technology safeguards.

SEC Commissioner Mark Uyeda emphasized that this exemption is designed to be controlled, with symbol and volume limits applied. He also noted that the framework will provide the SEC with data to assess on-chain securities trading and inform future rules.

The SEC has been developing this innovation exemption for months and had previously considered a temporary framework allowing limited trading of tokenized securities through automated market makers.