US SEC Poised to Allow Stock Token Trading in Potential Market Shakeup

The U.S. Securities and Exchange Commission (SEC) is poised to approve an 'innovation exemption' that would permit crypto companies to offer tokenized stocks—blockchain-based instruments representing traditional equities. This policy, expected to be unveiled by SEC Chair Paul Atkins, could enable firms like Coinbase to trade tokenized versions of U.S. stocks, allowing 24/7 trading and near-instant settlements, according to industry insiders. Crypto exchanges have already signaled readiness to launch tokenized stocks in the U.S., following moves by Robinhood, Kraken, and Coinbase to introduce such products overseas. The global market for tokenized public stocks has surged to over $6.4 billion since late 2024, according to data from RWA.xyz and CoinMarketCap. The exemption may temporarily waive SEC disclosure and investor-protection rules, allowing crypto firms to compete with traditional brokerages like Morgan Stanley’s E*Trade and Charles Schwab. However, Wall Street firms such as Citadel Securities and industry groups like the Securities Industry and Financial Markets Association (SIFMA) oppose the move, arguing it should undergo formal rulemaking rather than ad hoc approval. Atkins has also proposed a safe harbor for crypto fundraising, easing compliance with securities laws, as Congress’s window for crypto legislation narrows. Legal experts warn of potential investor risks, including liquidity concerns raised by Citadel Securities, which previously flagged tokenization’s impact on public markets. The SEC declined to comment on the pending policy changes.