By Kashmira Konduparty
The U.S. Securities and Exchange Commission (SEC) is preparing a policy that could allow crypto companies to offer blockchain-based versions of publicly traded stocks, a move that could significantly reshape how equities are bought and sold in the United States, according to Reuters.
The proposal is expected to be introduced through an “innovation exemption” championed by SEC Chairman Paul Atkins. The exemption would allow companies to test new digital asset business models without complying with all existing securities regulations, potentially opening the door for trading in tokenized versions of U.S. stocks.
Tokenized stocks are blockchain-based digital instruments designed to mirror the value of traditional shares. Supporters argue that the technology could modernize financial markets by enabling round-the-clock trading, reducing settlement times and lowering transaction costs. Unlike conventional stock trades, which generally settle on a next-day basis, tokenized transactions can be completed almost instantly on blockchain networks.
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Several major cryptocurrency firms are already preparing for the change. Crypto exchanged including Coinbase, Robinhood and Kraken have signaled plans to offer tokenized stocks in the United States if regulators permit the products. Some of those companies already provide similar services in international markets.
The initiative marks the latest step in the Trump administration’s effort to adopt a more favorable approach toward the cryptocurrency industry. Since taking office, the administration has rolled back several enforcement actions launched during the Biden administration and has pushed regulators to develop frameworks that encourage digital asset innovation.
However, the proposal has sparked concerns among some Wall Street firms, industry groups and regulatory experts. Critics argue that allowing crypto companies to perform functions traditionally handled by stock exchanges, brokerages and clearinghouses could introduce new risks to investors and market stability. They have urged the SEC to pursue formal rulemaking rather than granting broad exemptions.
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Questions have also been raised about investor protections. Depending on how they are structured, tokenized stocks may not always provide the same rights as traditional shares, such as voting privileges, dividend payments or access to exemption should be limited to products that offer rights and protections equivalent to conventional equities.
The market for tokenized public stocks has expanded rapidly over the past two years. According to industry data cited by Reuters, the global market capitalization of tokenized equities has grown to more than $6.4 billion, reflecting increasing interest from both investors and financial technology companies.
If adopted, the SEC’s proposal could accelerate the convergence of traditional finance and cryptocurrency markets, potentially creating a parallel system in which investors can trade stocks either through conventional exchanges or on blockchain-based platforms.