SEC Opens Door to Tokenised Stocks

The US Securities and Exchange Commission has created a five-year regulatory exemption for tokenised stock trading, giving blockchain-based securities a clearer path into US capital markets. The framework is designed to encourage innovation while keeping key investor protections in place.

The exemption will allow approved platforms to operate with temporary relief from some rules that apply to traditional exchanges. Certain liquidity providers will also avoid specific dealer registration requirements during the five-year period.

However, the framework does not remove oversight. Platforms must inform companies before listing tokenised versions of their shares, and issuers will have the right to object. Synthetic products that only track share prices through derivatives will remain outside the exemption.

Investor rights are central to the new structure. Eligible tokenised shares must provide the same economic and ownership rights as traditional stocks, including dividends and voting rights. This could help distinguish regulated products from digital assets that offer price exposure without direct ownership.

For the investment industry, the change could accelerate competition between established brokerages and digital asset platforms. Tokenised shares may support faster settlement, fractional ownership and longer trading hours, while allowing more investors to access traditional securities through blockchain-based systems.

The five-year period will also give regulators time to assess market behaviour, liquidity, transparency and operational risks before deciding whether the framework should become permanent.

The wider significance is structural. If adoption grows, tokenised equities could shift from a specialist digital product into a recognised part of mainstream investing, creating new distribution channels for securities while pushing traditional market infrastructure towards faster and more flexible trading.