US SEC Plans Tokenized Stock Trading Framework Under Innovation Exemption

TLDR

• The SEC may release an innovation exemption for tokenized stocks this week.
• Tokenized stocks could trade on crypto platforms under the SEC proposal.
• Some tokenized stock products may not include voting rights or dividends.
• DTCC plans limited tokenized asset trades in July and a broader launch in October.
• Nasdaq and ICE are also developing tokenized securities infrastructure.

The U.S. Securities and Exchange Commission is preparing a framework that could allow trading in tokenized versions of stocks, Bloomberg News reported, citing people familiar with the matter.

The proposal, described as an “innovation exemption,” could be released as soon as this week. It would create a regulatory pathway for digital versions of publicly traded securities to trade on crypto platforms under conditions set by the agency.

The plan comes as the Trump administration seeks to expand the use of blockchain technology in financial markets. It also follows recent movement in Congress, where the Republican-led Senate Banking Committee advanced legislation aimed at creating clearer rules for the cryptocurrency sector.

SEC Weighs Rules for Tokenized Stocks

Tokenized stocks are blockchain-based representations of traditional equities. They can be designed to track the value of public company shares while trading through crypto infrastructure rather than conventional stock exchanges.

According to Bloomberg, the SEC is leaning toward allowing trading in tokens that may not have the backing or consent of the public companies whose shares they follow. These tokens may also lack traditional shareholder rights, including voting rights or dividend payments.

That structure would make the proposed framework different from systems where tokenized assets are fully backed by shares held in custody. The final details of the SEC plan have not been released, and the timing could still change.

SEC Chair Paul Atkins said earlier this month that the agency was considering rulemaking for blockchain-based trading, settlement, and custody systems. He said existing securities rules may not fully match blockchain systems that combine trading, clearing, and settlement in one structure.

Wall Street Firms Build Blockchain Market Infrastructure

The expected SEC proposal comes as large financial market operators move deeper into tokenized securities. The Depository Trust & Clearing Corporation, which supports much of the U.S. securities market, has announced plans for limited production trades of tokenized assets in July, with a broader launch expected in October.

DTCC’s planned system would support tokenized versions of stocks and exchange-traded funds backed by assets held within its infrastructure. The project is aimed at testing blockchain-based settlement while keeping links to existing market systems.

Nasdaq is also developing a structure for blockchain-based shares that would preserve traditional ownership rights. The SEC approved Nasdaq’s tokenized securities plan in March, according to reports.

Intercontinental Exchange, the parent company of the New York Stock Exchange, has also announced plans tied to tokenized stocks and crypto-linked products through a partnership and investment connected to crypto exchange OKX.

Crypto Platforms Could Gain New Market Role

If adopted, the SEC’s innovation exemption could allow crypto trading platforms to list tokenized stock products under a dedicated framework. That would mark a new route for securities exposure outside traditional exchange systems.

Supporters of tokenized securities say blockchain settlement could shorten transaction times, support round-the-clock trading, and expand global access to U.S. market products. Market participants also expect regulators to focus on custody, disclosures, liquidity, investor protections, and whether tokens are backed by actual shares.

The proposal may also raise questions for public companies whose shares are tracked by tokenized products without their approval. In traditional equity markets, shareholders receive defined rights through regulated ownership structures. Some tokenized products may only give price exposure without direct ownership claims.

The SEC has not publicly confirmed the full terms of the reported plan. Any exemption would still need to explain which platforms can participate, what disclosures are required, and how trading would be monitored.

The tokenized stock framework would be part of a wider shift in U.S. crypto policy under the Trump administration. Regulators and lawmakers are reviewing how digital assets, stablecoins, crypto custody, and blockchain settlement should fit into financial market rules.

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