SEC Opens Door for Crypto with Tokenized Stock Exemption

The Securities and Exchange Commission (SEC) has approved a temporary exemption for certain tokenized U.S. stocks to be traded on-chain, marking a significant development in crypto regulation.

This move comes after the Senate failed to advance the CLARITY Act on September 15, leaving U.S. crypto regulation in limbo. Just two days later, SEC Chairman Paul Atkins announced that the agency was using its existing authority to facilitate on-chain trading of certain stocks.

The new framework allows Tokenized Securities Venues (TSVs) to operate on-chain markets without being considered traditional exchanges, provided they meet strict conditions. The exemption lasts for five years and is subject to public comment.

This development has significant implications for major crypto platforms, including Coinbase and Robinhood, which have already expressed interest in U.S. tokenized equities. Tokenization brings securities onto blockchain networks, potentially making trading, settlement, and ownership records more programmable, with possible gains in transparency, liquidity, and lower transaction costs.