SEC to propose tokenized stock framework as Wall Street efforts deepen: Bloomberg

The U.S. Securities and Exchange Commission (SEC) could soon introduce a new framework for trading tokenized stocks, according to a Monday report by Bloomberg Law, a move that may accelerate Wall Street firms push to bring traditional securities onto blockchain rails.

Bloomberg Law reported that the agency is preparing an "innovation exemption" that could allow trading platforms to offer digital versions of publicly traded securities under a lighter regulatory structure. The proposal could arrive as early as this week, according to people familiar with the matter cited by the publication.

The effort would mark one of the clearest signals yet that U.S. regulators are warming to tokenized securities, an area where crypto firms and major financial institutions increasingly overlap.

Tokenized stocks are blockchain-based versions of equities that can trade around the clock and settle faster than traditional shares. Supporters argue the structure could reduce settlement delays and make markets more accessible globally, but critics have warned about liquidity fragmentation and investor protections.

Wall Street firms have moved quickly to position themselves for that shift. The Depository Trust & Clearing Corporation (DTCC), which processes and safeguards much of the U.S. securities market, said it plans to begin limited production trades of tokenized assets in July ahead of a broader launch in October. The system would allow tokenized versions of stocks and ETFs backed by assets already held within DTCC's infrastructure.

Nasdaq is also developing a framework for companies to issue blockchain-based shares while preserving traditional ownership rights. The SEC approved the exchange operator's tokenized securities plan in March. Meanwhile, Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, also unveiled plans to expand into tokenized stocks and crypto-linked products through a partnership and investment tied to crypto exchange OKX.

The combined efforts point to a broader race to modernize the plumbing of the $126 trillion global equity market using blockchain technology.

SEC Chair Paul Atkins has signaled support for that direction. Speaking earlier this month, Atkins said the agency is considering formal rulemaking for onchain trading systems, blockchain settlement infrastructure and crypto custody models as financial markets become increasingly automated and AI-driven.

Atkins said existing securities rules do not fit blockchain-based systems that combine exchange, clearing and settlement functions into a single protocol, arguing that the SEC should clarify the rules through regulation rather than enforcement actions.