US SEC Advances Tokenized Securities Exemption

Tokenized deposits represent customers’ claims on bank deposits as blockchain-based tokens. They remain issued by regulated financial institutions, distinguishing them from privately issued stablecoins. If approved for launch, they could shorten cross-border payment and asset-settlement times and would signal that the U.S. Securities and Exchange Commission’s crypto innovation policy is beginning to extend into traditional banking.

SEC Chair Paul Atkins recently said tokenized deposits offered by traditional financial institutions could receive regulatory approval as early as 2027. Reports cautioned that approval is not assured, however, as questions remain over banking supervisory authority, deposit protection and rules for inter-institutional settlement. No initial participating banks, issuance amounts or firm launch dates have been announced.

The U.S. Securities and Exchange Commission's Investor Advisory Committee has endorsed securities tokenization, seeking to replace traditional settlement models by recording and trading shares on blockchains. The shift could enable near-instant, round-the-clock trading and reduce intermediary costs, but also raises concerns about investor protection, market fairness and information transparency.

As of July 19, 2026, the committee had voted to support the policy and recommended mandatory reporting requirements, fair-trading safeguards and rules governing third parties that put shares on-chain. SEC Chair Paul Atkins confirmed that the agency was developing guidance for tokenized stocks. No formal release date, eligibility thresholds or related amounts have been announced.

The US Securities and Exchange Commission has long applied securities laws to crypto token offerings, while the industry has criticized the lack of clarity over when a token constitutes an investment contract and when it can fall outside regulatory oversight. Chair Paul Atkins has therefore proposed “Regulation Crypto Assets,” combining exemptions for startups and fundraising with an investment-contract safe harbor to balance capital formation, disclosure and investor protection.

On March 17, 2026, Atkins proposed allowing startups to raise up to $5 million over a maximum of four years, with a separate exemption permitting offerings of up to $75 million in any 12-month period. The draft was submitted to the White House Office of Information and Regulatory Affairs for review in early April. On May 18, media reports said the SEC could introduce a separate “innovation exemption” as early as that week, allowing tokenized US equities to operate without full broker-dealer or exchange licenses under specified conditions.