The U.S. Securities and Exchange Commission is preparing to release an ‘innovation exemption’ for tokenized securities as early as next week, according to people familiar with the plan. The framework would let digital blockchain-based versions of publicly traded stocks trade on crypto platforms — even without a company’s approval or backing.
The new framework
Under the proposal, third parties could issue tokens that track the price of a public company’s shares. Those tokens would not carry traditional shareholder rights — no voting, no dividends, no ability to participate in shareholder meetings. What they would offer is faster settlement, cross-border portability, and a lower barrier to entry for investors historically shut out of equity markets.
SEC Chair Paul Atkins has framed the agency’s pivot as a matter of regulatory clarity, arguing that rulemaking beats enforcement. The exemption is the latest in a string of moves by the Trump administration to open U.S. markets to crypto-native products. The Republican-led Senate Banking Committee advanced crypto legislation earlier this month.
Market momentum and regulatory shifts
Tokenized equities already exist. The market holds $1.4 billion in distributed value across more than 2,200 assets, growing roughly 30% in the past 30 days. Monthly transfer volume has reached $3.24 billion, and the holder base has grown 25% in a month to about 265,000 people.
The SEC has also approved rule changes at major exchanges. Nasdaq got the green light in March 2025 for tokenized share trading that preserves traditional ownership rights. The NYSE received SEC approval in April 2025 and is building a platform for 24/7 onchain settlement. The Depository Trust & Clearing Corporation (DTCC) plans to begin limited production trades of tokenized assets in July 2025, with a broader launch in October 2025.
Questions remain
The new exemption raises a basic question: what are investors actually buying when they hold a tokenized stock with no shareholder protections? And who is responsible when something goes wrong — the issuer, the platform, or the token sponsor? The absence of consent from the underlying company adds another layer of risk. The SEC’s framework is expected to address some of these questions, but the details won’t be public until the filing drops next week.
