SEC Unveils Framework for Tokenized Securities

The US Securities and Exchange Commission (SEC) is set to release a framework for tokenized securities, according to Bloomberg. This exemption would allow traditional financial institutions to test blockchain-based securities without completing a full registration process.

The SEC has been expanding its engagement with tokenized assets in recent months. In March, the agency approved a rule change permitting Nasdaq to support the trading of tokenized shares. The New York Stock Exchange was also granted similar permission in April, paving the way for a 24/7 platform for trading and on-chain settlement of tokenized securities.

The SEC has consistently stated that tokenized assets remain classified as securities and subject to federal securities law. However, blockchain-based tokenized securities offer faster settlement, lower intermediary costs, and round-the-clock trading availability compared to traditional equities.