Regulatory & Compliance | 09.17.26

SEC Rolls Out 5-Year Exemption for Tokenized Stock Trading

by: Hannah Lang

The U.S. Securities and Exchange Commission (SEC) has introduced a five-year exemption allowing platforms to facilitate trading in blockchain-based “tokenized” stocks without complying with many rules governing traditional stock exchanges. Liquidity providers in tokenized stocks will also receive a five-year exemption from dealer registration requirements. Platforms must notify companies before listing tokenized shares and cannot offer them if issuers object, while synthetic tokens providing stock exposure through derivatives are prohibited. The SEC says tokenization could enable 24-hour trading, faster settlement, greater liquidity, lower costs, self-custody and fractional ownership. Tokenized stocks must provide the same rights as traditional securities, including dividends and voting rights. Companies including Coinbase have indicated plans to launch tokenized stocks in the U.S., while some crypto exchanges already offer them overseas.

Read the full article on Reuters