SEC Unveils Five-Year Exemption for Tokenized Stock Trading
The U.S. Securities and Exchange Commission (SEC) has unveiled its long-awaited exemption for tokenized stock trading, allowing companies to offer blockchain-based or 'tokenized' stocks and other securities.
The five-year exemption will apply to platforms that facilitate trading of tokenized stocks, which are digital tokens representing a stock and can be traded on a blockchain similar to a cryptocurrency.
The SEC says the exemption is necessary because these platforms may face substantial challenges complying with federal securities laws without potentially burdensome changes to their business models.
According to SEC Chair Paul Atkins, 'The Innovation Exemption is designed to resolve challenges that have prevented responsible innovation from taking root in the United States while providing investor protections and market integrity standards.'