The SEC issued an order on Sept. 17 allowing blockchain-based venues to trade tokenized versions of listed US stocks without registering as exchanges. The relief comes with strings: each token must carry the same rights as the traditional share it represents, trading is limited to approved participants, and the whole arrangement sunsets after five years.
What the order actually permits
Venues approved under the order can list tokenized shares of US-listed companies, but the SEC capped both the number of symbols and the volume they can handle. Issuers get a window to object before venues list tokens that outside firms create. The structure keeps the pilot inside existing securities law rather than carving out a new exemption that could be abused.
The five-year expiry means the SEC will revisit the framework, likely after seeing how the first wave of venues handles settlement, custody and shareholder rights. That's not a permanent green light.
Nine intermediaries in, six or seven out
Gabor Gurbacs, founder and CEO of tokenization platform Openassets, said buying a stock today passes through about nine intermediaries. He expects tokenization to remove six or seven of them. The shift, in his view, is enabled by new transfer agent rules that govern who records share ownership — the plumbing that makes tokenized shares legally equivalent to the ones sitting in a brokerage account.
Gurbacs said the investor experience should stay similar, while settlement and costs change underneath. That's the pitch: same ticker, same rights, less back-office friction.
Janus Henderson bets on inevitability
Nick Cherney, Head of Innovation at Janus Henderson, agreed the existing brokerage model can move to a blockchain with little visible difference. But he pushed back on the idea that cost savings alone will drive adoption, pointing out that US markets are already efficient. Instead, he floated new uses — paying rent with an S&P 500 fund, for instance — where tokenization unlocks something the current system can't easily do.
Cherney called tokenization 'an inevitability'. His firm already runs tokenized funds sold offshore to institutions, with roughly 200 institutions using them. The most successful of those funds has ranged between $500 million and $1 billion, according to Cherney. For scale, Janus Henderson's flagship ETF manages about $30 billion.
The size of the prize
Gurbacs said global ETFs total about $24 trillion. Tokenized assets, including stablecoins, stay below $500 billion. The gap is the argument: if even a sliver of ETF assets migrates to tokenized wrappers, the sector grows several times over. But the SEC's caps mean that migration starts small and slow.
The order doesn't answer every question. Which venues get approved, how quickly issuers object to third-party tokens, and whether the five-year clock gets extended are all open. The first venues to test the sandbox will set the tone for everyone watching from the sidelines.
