SEC Opens Limited Path for Onchain Trading of Tokenized U.S. Stocks

Tokenization moves representations of stocks and other conventional securities onto blockchain networks, potentially enabling round-the-clock trading, faster settlement and fractional ownership. Citi estimates the tokenized securities market could reach $5.5 trillion by 2030. SEC Chair Paul Atkins has promoted an “innovation exemption” that would let firms test new trading models with relief from some federal securities requirements, though questions persist over shareholder rights, fragmented liquidity and fair competition.

The SEC paused its draft on May 22 after concerns about third-party tokens and shareholder protections, then prepared to release at least part of the framework alongside an Aug. 14 open meeting. The agency delayed it again on Aug. 13 without setting a new timetable. The White House feared the move could complicate congressional negotiations over the CLARITY Act, while Wall Street institutions including SIFMA argued that broad market changes should proceed through formal notice-and-comment rulemaking.

Tokenized equities use blockchain-based instruments to represent shares in listed companies, potentially allowing investors to transfer and trade exposure outside conventional exchange hours. A regulatory exemption could bring stocks such as Apple and Tesla onto blockchain rails, accelerating settlement and expanding market access, while raising questions about shareholder rights, custody, investor protection and oversight across fragmented trading venues.

The U.S. Securities and Exchange Commission could propose an innovation exemption as early as Friday, Aug. 14, 2026, according to the report. The framework would permit tokenized shares to trade on-chain 24 hours a day, seven days a week, with real-time settlement. Led by the SEC chair, the initiative is expected to be introduced alongside the agency’s Reg Crypto framework to establish a compliance route for blockchain-based securities.

Tokenized securities use blockchain-based tokens to represent traditional assets such as stocks. The technology could enable round-the-clock trading and more efficient settlement, but holders’ access to dividends, voting rights and asset protections still depends on the legal framework and market infrastructure. The US Securities and Exchange Commission’s current framework dates to the 1930s, making permanent rules from Congress crucial to industry investment and investor protection.

A June 15, 2026, report said SEC Chair Paul Atkins was using the agency’s existing exemptive authority to develop a temporary framework allowing companies to trade tokenized stocks. The proposal has yet to disclose the amounts involved or a formal effective date. SEC Commissioner Hester Peirce confirmed that the agency has broad exemptive authority, but legal experts cautioned that comprehensive legislation typically takes 12–18 months. Questions surrounding third-party issuance, buyer identification, dividends and voting rights remain unresolved.

The Depository Trust Company, or DTC, launched a tokenization pilot under an SEC no-action letter dated December 11, 2025, and Nasdaq became the first exchange to receive approval on March 18, 2026. The framework allows compliant securities to retain the same CUSIP numbers and shareholder rights while testing blockchain settlement within the existing regulatory system. It does not immediately authorize 24/7 trading.

The New York Stock Exchange filed SR-NYSE-2026-17 with the US Securities and Exchange Commission on April 9, 2026. The SEC published the filing on April 17 and opened it for public comment through May 13. The proposed rules would allow DTC-eligible securities in tokenized or conventional form to share an order book and receive equal priority, while retaining T+1 settlement. The filing involves no investment amount, and a 24/7 platform would require separate approval.

Securities tokenization uses blockchain to record ownership interests in stocks or ETFs and has previously developed mainly on crypto platforms or in over-the-counter markets. Nasdaq is now integrating the technology into an SEC-regulated national securities exchange and the DTC clearing system. Crucially, onchain shares will retain the same legal, economic and governance rights as traditional shares.

The SEC approved Nasdaq’s rule change on March 18, 2026. DTC’s three-year pilot covers Russell 1000 constituents and ETFs tracking major indexes including the S&P 500 and Nasdaq-100. Eligible participants may opt for tokenized settlement, while the two forms of shares will use the same ticker, CUSIP and order book. The existing T+1 settlement cycle and trading hours will remain unchanged, and no approved monetary amount was set for the program.