The U.S. Securities and Exchange Commission is moving closer to creating a regulatory pathway for tokenized stocks, with industry participants expecting a new exemption that could support upcoming product launches.
According to a Reuters report citing legal sources, SEC Chair Paul Atkins is anticipated to introduce an innovation exemption. This would allow companies to test blockchain-based financial products under a modified regulatory framework, easing the path for offerings that enable 24/7 trading and near-instant settlement.
The expected move comes as several crypto firms prepare tokenized equity products. As reported by crypto.news, Coinbase has disclosed plans to launch tokenized stocks backed one-for-one by underlying shares. The framework being discussed would ensure these tokenized shares carry the same economic rights as traditional equities, including dividends and voting privileges.
The proposal follows earlier reports that the SEC had delayed efforts due to investor protection and custody concerns. Industry participants now believe the agency is preparing a revised approach that would allow experimentation without requiring full compliance with every existing rule.
Parallel Market Structure Review
Separately, the SEC last week advanced a market structure proposal that could influence how tokenized equities eventually operate. The agency proposed rescinding two key provisions of Regulation NMS that have governed U.S. stock trading since 2005.
The proposal would eliminate Rule 611, which prevents inferior price execution, and Rule 610(e), which addresses locked and crossed quotations. Chair Atkins argued that two decades of experience justified a fresh review, stating the regulation may have produced unintended consequences that limited competition.
While this proposal does not directly authorize tokenized stock trading, it arrives as the SEC continues examining how to accommodate blockchain-based securities infrastructure.
Rapid Growth of Tokenized Equities
Interest in the sector has surged. Data from CoinGecko shows tokenized stocks expanded from just 14 assets on January 31, 2024, to 478 assets by May 31, 2026—growth of more than 3,300%. CoinGecko identified tokenized equities as the fastest-growing crypto category during that period.
The market is drawing traditional finance players. A WSJ report indicates Citigroup is preparing tokenized shares tied to private companies like OpenAI and Anthropic, initially targeting international investors. The New York Stock Exchange is also developing infrastructure for 24-hour stock trading through tokenized systems.
The SEC’s ongoing review of exemptions and market structure rules has positioned blockchain-based stock trading closer to the U.S. regulatory mainstream than at any point since the concept emerged.
Based on reporting from crypto.news.
