The framework aims to enable blockchain-based trading of traditional stocks and ETFs under a lighter regulatory regime.
The U.S. Securities and Exchange Commission plans to release a new framework for tokenized stocks as early as this week. The proposal includes an ‘innovation exemption’ allowing trading platforms to offer digital versions of publicly traded equities with reduced regulatory oversight.
Tokenized stocks, which trade on blockchain rails, promise faster settlement and 24/7 trading. The SEC’s move follows pressure from exchanges like Nasdaq and banks such as Morgan Stanley, which are developing blockchain-based share issuance systems. Critics caution about potential liquidity risks and investor protection challenges.
The framework signals regulatory support for merging traditional securities with blockchain technology, a key focus for cryptocurrency firms and financial institutions.