SEC Opens Path to Onchain Equity Trading with Five-Year Tokenized Stock Exemption

The Securities and Exchange Commission (SEC) has introduced an exemption for tokenized U.S. stocks, allowing them to trade through permissioned automated market makers for five years.

This move could benefit companies like Coinbase, Robinhood, and Circle, as they already have the necessary infrastructure to support onchain equity markets.

Coinbase's Base platform offers one-to-one-backed stock tokens, but its U.S. products still need compliance changes to meet the new SEC requirements.

Royalhood's overseas stock tokens provide economic exposure without full underlying shareholder rights, which conflicts with the SEC's requirement that token holders receive the same interest, dividends, voting rights, and liquidation rights as traditional shareholders.