SEC Preparing Tokenized Securities Framework for Trading Platforms

U.S. Securities and Exchange Commission is preparing an innovation exemption that would allow trading platforms to offer digital versions of publicly traded securities under a lighter regulatory structure, Bloomberg Law reported on Monday. The proposal could arrive as early as this week, according to people familiar with the matter cited by the publication.

The effort would mark a regulatory step toward tokenized securities, an area where crypto firms and major financial institutions increasingly overlap.

Tokenized stocks are blockchain-based versions of equities that can trade around the clock and settle faster than traditional shares. The Depository Trust & Clearing Corporation plans to begin limited production trades of tokenized assets in July ahead of a broader launch in October.

The system would allow tokenized versions of stocks and ETFs backed by assets already held within DTCC's infrastructure. Nasdaq is also developing a framework for companies to issue blockchain-based shares while preserving traditional ownership rights.

The SEC approved the exchange operator's tokenized securities plan in March. Intercontinental Exchange, the parent company of the New York Stock Exchange, unveiled plans to expand into tokenized stocks and crypto-linked products through a partnership and investment tied to crypto exchange OKX.

Atkins has signaled support for that direction.

Speaking earlier this month, Atkins said the agency is considering formal rulemaking for onchain trading systems, blockchain settlement infrastructure and crypto custody models. Atkins said existing securities rules do not fit blockchain-based systems that combine exchange, clearing and settlement functions into a single protocol, arguing that the SEC should clarify the rules through regulation rather than enforcement actions.