SEC inches toward tokenized-stock exemption as Coinbase preps U.S. launch
The U.S. Securities and Exchange Commission is moving closer to a regulatory pathway for tokenized stocks, a shift that could open the door for crypto firms such as Coinbase to offer U.S. customers blockchain-based equities. According to Reuters, SEC Chair Paul Atkins is expected to propose an “innovation exemption” that would let companies pilot tokenized financial products under a relaxed regulatory regime.
What the proposed exemption would do
- Allow limited testing of blockchain-based securities without forcing full compliance with every existing disclosure and investor-protection rule.
- Potentially permit tokenized shares to carry the same economic rights as traditional equities — including dividends and voting — while operating with near-instant settlement and 24/7 tradability.
Industry moves and product plans
- Coinbase has disclosed plans to launch tokenized stocks backed one-for-one by the underlying shares, aiming to offer U.S. access.
- Binance and other exchanges have already expanded tokenized equity offerings outside the United States.
- Large institutions and market incumbents are also active: Citigroup reportedly plans tokenized shares tied to private companies (e.g., OpenAI, Anthropic) for international investors first, and the NYSE is building infrastructure to support 24-hour stock trading via tokenized systems.
Market-structure changes under review
Separately, the SEC last week advanced a market-structure proposal that could shape how tokenized equities operate in the U.S. The agency proposed rescinding Rules 611 and 610(e) of Regulation NMS—longstanding protections that prevent trades at inferior prices and address locked/crossed quotes—and removing related definitions from Rule 600. The proposal will trigger a 60-day public comment period after publication in the Federal Register.
Chair Atkins has argued that two decades of experience with Rule 611 justify a fresh review, saying the rule may have produced unintended consequences that limited competition and added complexity. While this market-structure reform doesn’t itself authorize tokenized trading, it signals the SEC’s broader effort to rethink the rules that govern equity markets as blockchain-based infrastructure evolves.
Why the pivot matters
Regulatory caution had slowed earlier attempts to legalize tokenized equities, with the SEC raising concerns over custody and investor protection. Industry sources now say the agency appears to be moving toward a revised, experimental approach that balances market safety with innovation.
Market momentum
Tokenized equities have surged in recent years. CoinGecko data show tokenized stocks grew from 14 assets on Jan. 31, 2024, to 478 assets by May 31, 2026 — an increase of more than 3,300% — making them the fastest-growing crypto category since 2024. Real-world asset token listings also expanded sharply, from 64 to 1,282 projects over the same period.
What’s next
If adopted, an innovation exemption plus updated market structure rules could bring tokenized stock trading closer to the U.S. mainstream than ever before. The SEC’s proposals will face public comment and scrutiny from lawmakers, exchanges, and industry participants before any final rules are adopted — but the regulatory landscape is clearly shifting toward experimentation with blockchain-based securities.
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