SEC Unveils Pathway for Tokenized Stocks on Blockchain Venues
The US Securities and Exchange Commission (SEC) has issued a five-year Innovation Exemption that allows certain blockchain venues to trade tokenized US stocks. This exemption is a significant step forward for the cryptocurrency industry, which has been struggling to gain traction in the US market.
The new framework requires tokenized stocks to maintain the same rights and privileges as their traditional counterparts. Smart contracts must be auditable and publicly accessible, with deployment on public blockchains. Additionally, trading volumes are limited, and venues must verify that each token provides holders with the same rights and privileges as the equivalent traditional stock.
The SEC's decision comes after the US Senate failed to advance the CLARITY Act in September. Despite this setback, the SEC has confirmed its intention to roll out regulations for the cryptocurrency industry within its statutory authority.