SEC Again Delays Tokenization Exemption on White House, Wall Street Concerns

The U.S. Securities and Exchange Commission’s planned innovation exemption is intended to let firms test blockchain-based trading of tokenized securities under tailored relief rather than the full conventional market framework. The initiative matters because tokenization could enable round-the-clock trading and faster settlement, but it also raises questions about investor rights, market fragmentation and regulatory arbitrage. Citi in June projected tokenized assets could grow from about $17 billion to $5.5 trillion by 2030, while DTCC, NYSE and Nasdaq are developing related infrastructure.

The SEC decided on Aug. 13 to postpone the exemption again, following an initial delay on May 22. The agency had been prepared to release at least part of the framework alongside an Aug. 14 open meeting on “Reg Crypto,” which was also canceled. The White House warned that unilateral SEC action could complicate congressional negotiations over the CLARITY Act, while Wall Street institutions argued that substantial market-structure changes should undergo formal notice-and-comment rulemaking. The SEC has not announced a new timetable.