SEC Prepares Innovation Exemption for Tokenized U.S. Stocks

The Securities and Exchange Commission is preparing an “innovation exemption” that would permit trading of blockchain-based tokenized U.S. stocks. Regulators could release the framework as soon as this week. Under the proposal, third-party tokens could trade on decentralized crypto platforms and might not be issued or endorsed by the underlying public companies.

Those tokens may track share prices but can lack traditional shareholder rights such as voting and dividend access. Market participants have raised concerns about tokens circulating without the recordkeeping, voting processes and dividend mechanisms tied to registered shares.

The exemption is part of efforts to set rules for tokenized securities. Clearing and settlement infrastructure providers and major exchanges are building support: the Depository Trust & Clearing Corporation plans limited production trades using its tokenization service in July 2026 and a wider rollout in October 2026. Exchange operators announced equity token designs and platforms for on-chain trading and settlement earlier this year.

Market metrics show rapid growth in tokenized stock activity. Distributed tokenized stock value is about $1.4 billion across 2,246 tokenized assets, up nearly 30% in the past 30 days. Monthly transfer volume is roughly $3.24 billion, and the holder base is approximately 265,000 wallets, an increase of about 25% over the same period.

Value concentration is pronounced: one provider holds about $883 million of tokenized equity value, roughly a 60% share, while a second platform holds about $404.5 million, or about 27% of the market.

The proposed exemption would address disclosure requirements, custody rules and how regulators treat tokens that lack traditional shareholder rights, but the exact legal contours have not been published. If finalized, the framework would define how existing securities laws apply to on-chain representations of equities.

Developers, asset managers and exchange operators are awaiting the text of the exemption and further guidance on compliance and implementation as they integrate tokenized equities into trading and post-trade systems.