Don't want to trade it yourself?
Our desk runs DEX portfolios on profit share.
<a href="https://www.google.com/preferences/source?q=finance.biggo.com” rel=”nofollow noopener” target=”_blank”>Add preferred source
The U.S. Securities and Exchange Commission has issued a five-year exemption allowing blockchain-based platforms to facilitate trading in tokenized stocks, marking a major step toward integrating digital assets with traditional equity markets. The order, effective immediately, exempts qualifying venues from many exchange rules and relieves liquidity providers from dealer registration requirements. Platforms must notify issuers 30 days before listing tokenized shares and cannot proceed if companies object. Tokenized stocks must carry the same rights as underlying shares, including dividends and voting privileges, while synthetic derivative-based tokens are excluded. SEC Chairman Paul Atkins said the Innovation Exemption aims to resolve obstacles that have blocked responsible innovation while maintaining investor protections. The move follows stalled crypto legislation in the Senate and is partly intended to reduce demand for offshore synthetic token products. Coinbase, Robinhood, and Kraken are among firms positioned to enter the market, though issuer receptiveness remains uncertain.
Key Elements
The U.S. Securities and Exchange Commission on Thursday issued a long-anticipated regulatory exemption that clears the way for companies to facilitate trading in blockchain-based, or tokenized, versions of equities and other securities, a decision that could reshape how investors access traditional financial markets.
Under the new framework, trading platforms that handle tokenized stocks will receive a five-year reprieve from many of the rules that govern established exchanges such as Nasdaq and the New York Stock Exchange. Liquidity providers in these tokenized assets are also being granted a five-year exemption from dealer registration requirements.
The order, which takes effect immediately, includes several conditions designed to protect issuers and investors. Venues must notify companies 30 days before listing tokenized versions of their shares, and they are barred from offering such products if the issuer objects. Tokenized stocks permitted under the exemption will not be structured as derivatives and will carry the same rights and privileges as the underlying shares, including dividends and voting rights.
Synthetic tokens that provide exposure to a stock through a derivative or other financial product will not qualify for the exemption, according to an SEC official.
The move arrives just days after crypto market-structure legislation failed to clear a key procedural vote in the Senate. While negotiations over the Clarity Act have stalled, the SEC has spent more than a year using its existing statutory authority to craft rules for the digital asset sector.
“The Innovation Exemption is designed to resolve challenges that have prevented responsible innovation from taking root in the United States while providing investor protections and market integrity standards,” SEC Chairman Paul Atkins said in a statement.
Atkins added that while the exemption is temporary, it would allow tokenized trading venues to operate “in a permissioned environment today while the Commission considers the need for additional action to facilitate on-chain trading.”
The agency said the relief is necessary because platforms offering tokenized stocks may face substantial challenges complying with federal securities laws “without potentially burdensome changes” to their business models. The order also invites public comment on possible modifications and next steps, with the experience gained from market participants expected to inform any final rulemaking.
Proponents of tokenized securities argue the technology could transform equity markets by enabling round-the-clock trading and instant settlement, reducing transaction costs and boosting liquidity. The SEC itself noted that tokenization could allow investor self-custody and fractional ownership of shares.
The decision is also partly aimed at reducing the appeal of offshore venues that currently offer synthetic tokenized products purportedly linked to U.S. stocks
A number of prominent crypto firms have already signaled their intent to enter the space. Coinbase has indicated plans to launch tokenized stocks in the United States once regulations permit, while Robinhood, Kraken, and several other exchanges already offer similar products in overseas markets.
It remains unclear how receptive U.S. public companies will be to allowing tokenized versions of their shares to trade on blockchain-based venues. SEC officials acknowledged that uncertainty, but pointed to potential advantages that a tokenized model could offer issuers.
The exemption represents one of the most significant regulatory steps toward integrating digital asset infrastructure with the roughly $75 trillion U.S. stock market.
Once added, BigGo Finance appears first in Google Search Top Stories, so you get the broadest, most up-to-the-minute, and most comprehensive global financial news first.
Source: finance.biggo.com