SEC Grants Temporary Innovation Exemption for Tokenized Stock Trading
The SEC has introduced a five-year exemption allowing blockchain-based platforms to trade tokenized versions of real U.S. stocks without registering as traditional stock exchanges. These platforms, known as Tokenized Securities Venues (TSVs), enable around-the-clock trading with near-instant settlement times compared to the standard one-day cycle. The tokens represent actual shares and include all ownership rights like dividends and voting privileges. The exemption includes strict limitations: each TSV can offer up to 75 major stocks or 250 smaller ones, handling no more than a small fraction of daily trading volume for any given stock. Companies also have the right to opt out if they receive notice within 30 days. While tokenized shares use blockchain technology and smart contracts from platforms like Ethereum or Solana, only approved participants can trade in these pools. Despite its potential innovation, the exemption is described as a controlled experiment with limited scope. The SEC has excluded synthetic tokens that mimic stock prices without actual ownership rights.
Topics: blockchain financial regulation SEC tokenized stocks