SEC Set to Unveil Tokenized Stock Trading Exemption, Sparking 24-Hour Market Hopes

The US Securities and Exchange Commission (SEC) is set to unveil an exemption that would allow tokenized securities to trade on blockchain rails, potentially bringing 24-hour equity markets closer to reality.

According to Bloomberg, the agency will publish details of the framework as early as August 14. The exemption would provide conditional relief from existing securities regulations, enabling companies to test on-chain financial products and trading services in a controlled environment.

The SEC is still grappling with how to treat tokens created by third parties that have no relationship with the underlying issuer. The agency has drawn a distinction between custodial models, where actual shares are held in reserve to back the token, and synthetic models, where the token merely provides price exposure without direct ownership of the underlying equity.

Broader crypto-related initiatives are also on the SEC's near-term agenda, including an open meeting on August 14 to consider a separate rule proposal that would establish tailored offering requirements for certain investment contracts involving crypto assets. The measures have been characterized by Bloomberg ETF analyst Eric Balchunas as potentially significant for the US cryptocurrency industry.