SEC Opens Five-Year Window for Tokenized Stock Trading

The relief marks a shift in how the agency approaches blockchain-based assets, moving away from synthetic derivatives that merely track price toward fully backed equity representations. To qualify, platforms must ensure their smart contracts are public and auditable, operating on a permissionless ledger even if the underlying trading environment remains permissioned. Furthermore, venues are required to synchronize trading halts with primary exchanges, ensuring that onchain activity does not persist when the main market is closed due to volatility or regulatory intervention.

SEC Chair Paul Atkins emphasized that the measure aims to foster responsible innovation while maintaining rigorous investor protection standards. The exemption limits the number of supported stock symbols and trading volume per venue, providing the Commission with a controlled environment to monitor market integrity. Platforms such as Coinbase and Robinhood could potentially utilize this framework, though they must still navigate complex compliance requirements. By requiring issuers to be notified before their shares are tokenized, the SEC seeks to balance digital-age market access with the established governance of U.S. capital markets.