The U.S. Securities and Exchange Commission has moved closer to allowing tokenized stock trading as industry participants expect a new regulatory exemption that could support upcoming offerings from crypto firms, including Coinbase.
Summary
- SEC is reportedly preparing an innovation exemption that could permit tokenized stock trading in the U.S.
- Coinbase plans to launch 1:1-backed tokenized shares as regulatory discussions advance.
- CoinGecko data shows tokenized stocks grew more than 3,300% between 2024 and 2026.
According to a Reuters report citing lawyers and market analysts, SEC Chair Paul Atkins is expected to introduce an innovation exemption that would allow companies to test blockchain-based financial products under a modified regulatory framework.
The proposal comes as several crypto firms prepare tokenized equity products that would let users trade shares around the clock with near-instant settlement.
As reported by crypto.news, Coinbase has already disclosed plans to launch tokenized stocks backed one-for-one by underlying shares, while Binance and other exchanges have expanded similar offerings outside the United States. Under the framework being discussed, tokenized shares could carry the same economic rights as traditional equities, including dividend payments and voting privileges.
The expected exemption follows earlier reports that the SEC had delayed efforts to permit tokenized equities after raising concerns about investor protection standards and custody requirements.
Industry participants cited by Reuters now believe the agency is preparing a revised approach that would allow experimentation without requiring full compliance with every existing disclosure and investor-protection rule.
SEC reviews market structure rules
Separate from the proposed exemption, the SEC last week advanced a market structure proposal that could influence how tokenized equities eventually operate in the United States.
As crypto.news reported earlier, the agency proposed rescinding Rules 611 and 610(e) of Regulation NMS, two provisions that have governed U.S. stock trading since 2005.
Rule 611 currently prevents trading venues from executing stock orders at inferior prices when better quotes are available elsewhere, while Rule 610(e) addresses locked and crossed quotations in national market system stocks.
The regulator said the proposal would also remove related definitions from Rule 600 and open a 60-day public comment period after publication in the Federal Register.
Commenting on the proposal, SEC Chair Paul Atkins argued that two decades of experience with Rule 611 justified a fresh review of its market impact. According to Atkins, the regulation may have produced unintended consequences that limited competition and increased complexity within equity markets.
While the proposal does not authorize tokenized stock trading, it arrives as the SEC continues examining ways to accommodate blockchain-based securities infrastructure. Previous reporting indicated that agency officials have been studying an innovation exemption specifically designed to support tokenized public equities.
Tokenized stocks attract growing interest
Interest in the sector has accelerated sharply over the past two years. According to data from CoinGecko, tokenized stocks expanded from 14 assets on Jan. 31, 2024, to 478 assets by May 31, 2026, representing growth of more than 3,300%.
CoinGecko identified tokenized equities as the fastest-growing crypto category during that period. The same dataset showed real-world assets increasing from 64 projects to 1,282, a gain of roughly 1,900%.
Large financial institutions have also begun exploring the market. As per a WSJ report, Citigroup is preparing tokenized shares tied to private companies such as OpenAI and Anthropic, initially targeting international investors before potentially expanding access to U.S. clients.
Elsewhere, the New York Stock Exchange is developing infrastructure for 24-hour stock trading through tokenized market systems, according to previous disclosures.
Taken together, the SEC’s ongoing review of tokenized equity exemptions and traditional market structure rules has positioned blockchain-based stock trading closer to the U.S. regulatory mainstream than at any point since the concept first emerged.
Credit: Source link
