SEC Opens Path to 24-Hour Tokenized Stock Trading

By Hassan Shittu

The U.S. Securities and Exchange Commission (SEC) has opened a five-year regulatory pathway for tokenized stocks to trade on public blockchains, giving the crypto industry a route into U.S. equity markets just days after Congress failed to advance the broader CLARITY Act.

The SEC’s Innovation Exemption, released Thursday, allows certain trading venues and liquidity providers to facilitate trading in tokenized representations of U.S. stocks without being treated as traditional national securities exchanges or registered broker-dealers, provided they meet a set of conditions. 

🚨 TODAY: The SEC issued an order granting temporary, conditional exemptive relief to Tokenized Securities Venues from the definition of “exchange” in the Exchange Act to trade tokenized NMS stock using innovative permissioned automated market makers and liquidity pools. pic.twitter.com/VDi7Oty2d9

— U.S. Securities and Exchange Commission (@SECGov) September 17, 2026

The move could eventually allow investors to trade tokenized versions of stocks around the clock and connect them directly to blockchain-based financial markets.

SEC gives issuers control over whether shares can go on-chain 

The SEC introduced its Innovation Exemption just 48 hours after the Senate voted 49-50 against advancing the CLARITY Act, leaving the U.S. without broader digital asset market structure legislation that could have established clearer federal rules for the crypto industry.

The move follows SEC Chairman Paul Atkins’ pledge that the agency would act regardless of whether Congress passed the bill. Unlike legislation, however, the administrative exemption can be modified or revoked and is currently limited to five years.

My thanks go to everyone who put so much effort into the CLARITY Act— across the Administration, Congress, investors, and innovators. Our collective conviction that America must continue to lead is indispensable.

I have been unequivocal: with or without legislation, we will act…

— Paul Atkins (@SECPaulSAtkins) September 16, 2026

The framework focuses on tokenized securities, which represent traditional financial assets on blockchain networks. Under the SEC’s approach, a tokenized stock must represent actual ownership of the underlying shares rather than simply track their price.

That distinction is central to the new rules, as token holders must receive the same rights as traditional shareholders, including dividends, voting rights, and participation in corporate actions. Synthetic products that provide only price exposure are excluded.

The framework also gives companies control over whether their shares can be tokenized. Trading venues must notify an issuer at least 30 days before listing its stock, and the listing cannot proceed if the company objects.

Atkins said the exemption is intended to help move U.S. capital markets toward onchain infrastructure while allowing regulators to study the technology and its risks.

The exemption takes effect immediately and will remain in place for five years. During that period, the SEC will collect market data and public feedback to determine whether permanent rules or further regulatory changes are needed.

Nine requirements platforms must meet under the SEC exemption 

The SEC’s “Innovation Exemption” sets nine requirements for tokenized securities venues (TSVs), addressing a growing dispute over whether tokenized equities represent actual ownership or merely provide synthetic exposure.

Robinhood, Coinbase, Gemini, and Kraken have already offered tokenized equity products outside the U.S., but the model has raised questions over shareholder rights. 

Robinhood has said it plans to allow holders to redeem its stock tokens for the underlying shares on a one-to-one basis and add voting rights, potentially bringing its model closer to the SEC’s framework.

For too long, regulatory uncertainty has prevented responsible, yet critical innovation from taking root in the United States.

It has been a priority of my chairmanship to reverse this trend.

Though temporary, the Innovation Exemption is a principled, structured grant of relief… pic.twitter.com/PIpxheEyHc

— Paul Atkins (@SECPaulSAtkins) September 17, 2026

Under the exemption, TSVs must be incorporated in the U.S. and maintain a domestic office. 

Traders and liquidity providers must be screened before gaining access, with anonymous trading prohibited.

Tokenized shares must be backed by auditable smart contracts deployed on public, permissionless blockchains. Investors must receive the same rights as traditional shareholders, including voting, dividends, and participation in corporate actions, excluding products that only track stock prices.

TSVs must also notify issuers 30 days before listing their shares, giving companies the right to object. The SEC will limit eligible assets and trading volumes, while tokenized shares must halt whenever their underlying stocks stop trading.

Platforms must comply with U.S. sanctions and federal anti-fraud rules, as the SEC also provides a conditional broker-dealer exemption for liquidity providers that meet its requirements.

What the SEC framework means for Securitize, Coinbase, and Robinhood 

The SEC’s framework could reshape how major platforms offer tokenized stocks, with Securitize appearing closely aligned with the agency’s shareholder-rights requirements.

The company tokenizes securities at the issuer level and is working with the New York Stock Exchange on a tokenized stock platform.

Coinbase could also qualify if it upgrades its tokenized stocks to provide full voting and redemption rights.

Robinhood faces a bigger restructuring challenge as its current stock tokens provide synthetic exposure through a Jersey-based structure rather than direct ownership of U.S. shares.

To qualify, Robinhood would need to adopt a model that gives token holders traditional shareholder rights, potentially opening the door for Robinhood Chain to host tokenized stock trading.

Circle’s Arc Chain is another potential infrastructure option, offering USDC-based gas and fast transaction finality.

The SEC said the five-year exemption will generate market data on trading volume, liquidity, price discovery, and manipulation risks. 

The results will help determine whether tokenized securities become a permanent part of U.S. capital markets.

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