SEC opens door to tokenized U.S. stock trading. Here’s who could benefit

The U.S. Securities and Exchange Commission’s (SEC) new experiment with tokenized stocks could give an early advantage to a particular corner of crypto: firms that put real securities on blockchains and the decentralized crypto platforms built to trade them in a regulated manner.

The agency’s framework favors tokens that represent actual U.S. shares and carry the same rights as traditional stock, including dividends and voting rights.

That thesis is central to this new exemption. “This is extremely positive because it gives a way to trade real tokenized stocks,” Carlos Domingo, CEO of digital asset and real-world asset tokenization platform Securitize, told CoinDesk.

That leaves room for different tokenization models, ranging from issuer-sponsored projects to custodial structures, while excluding synthetic products that only provide price exposure. Meaning it could potentially favor firms working directly with issuers, custodial models that preserve full shareholder rights and transfer agents over platforms that simply create stock-linked products.

The agency also opens another door on the trading side.

Tokenized stocks can trade through automated market makers (AMMs) on public blockchains, potentially bringing decentralized finance (DeFi protocols closer to U.S. securities markets. However, whichever platforms they trade in, they must have controlled access through KYC, trading limits and comply with other regulatory guardrails.

Securitize’s Domingo said the SEC’s move is a strong validation for tokenized shares that represent the actual underlying security, or a full security entitlement

He added that the framework reinforces the case for issuer-sponsored tokenization and “will accelerate the adoption of native tokenized security.”

Bullish BLSH$35.11, CoinDesk’s parent company, is also expanding its tokenization business by acquiring the transfer agent Equiniti. And according to Thomas Cowan, global head of tokenization at Bullish, the move is “a step in the right direction.”

“It’s showing that regulators are thinking about how to enable AMMs and new market structure,” said Cowan.

Still, Cowan cautioned that the exemption should be viewed as a controlled first step rather than the arrival of a full-fledged onchain stock market.

“It is definitely not a broad opening that the crypto community was looking for for tokenized stocks to grow immediately, but it is a fantastic start for the future of the financial markets and what is possible,” he said.

Securitize’s stock surged 14% while Bullish’s stock was trading 10% higher on Thursday.

The SEC also gives public companies a say when an unaffiliated third party tokenizes their shares.

Before trading of any company’s tokenized stocks can start, the trading venue must notify the issuer and wait 30 days. If the company objects, the token cannot trade under the exemption.

“The issuer veto is the key safeguard,” said Joris Delanoue, CEO and co-founder of regulated onchain transfer agent Fairmint.

That provision follows a public spat this summer after AMC Entertainment CEO Adam Aron criticized Robinhood for offering AMC-linked stock tokens without the company’s involvement.

Third-party custodial models can still fit the framework, but only if the token preserves the rights attached to the underlying stock and the issuer does not object.

Synthetic products that merely track a stock’s price without carrying the same rights do not qualify for the SEC’s exemption.

“The SEC is drawing an important line around what tokenized equities should actually represent: putting stocks onchain shouldn’t mean stripping away the rights that make them stocks in the first place,” said Gabo Otte, CEO of Dinari.

That potentially puts pressure on offshore stock-token products such as Robinhood’s Stock Tokens offering, Kraken’s xStocks and Ondo Finance’s offshore products, which give investors price exposure to U.S. equities without making them shareholders in the underlying companies.

Those models would need to change if providers want to use the SEC’s new U.S. pathway.

Robinhood’s crypto head, Johann Kerbrat, nevertheless welcomed the agency’s move.

“The SEC innovation exemption is a signal that tokenization is ready to come to the United States,” Kerbrat said. “This is a major step by the agency and will allow liquid tokenized securities markets to develop onshore.”

Robinhood’s shares are up about 2.8% on Thursday.

The other potentially significant opening is for regulated DeFi trading platforms.

Under the exemption, tokenized securities venues can use automated market makers, or AMMs, to trade tokenized U.S. stocks without registering as traditional securities exchanges. Meanwhile, centralized crypto exchanges like Coinbase and Kraken might be outside of the SEC’s framework. Coinbase shares rose about 5% on Thursday. Kraken is a private company.

The move could bring more activity to the blockchains and decentralized trading applications underneath those markets, said Zach Pandl, head of research at Grayscale.

“The innovation exemption will bring more utility of tokenized assets, benefiting users, leading public blockchains, including Ethereum

ETH$2,451.20

, Solana (SOL), and BNB Chain

BNB$728.29

, and decentralized trading applications such as Uniswap (UNI), Aerodrome (AERO), and Raydium

RAY$1.4676

,” Pandl said.

The technology can run on public, permissionless blockchains, but access to the market itself must be controlled. In practice, that could start to create a regulated version of DeFi for U.S. securities, using some of crypto’s existing trading technology but with KYC, trading limits and securities-market oversight layered on top.

“I expect that all the DeFi AMMs will launch something,” Domingo said. “I think this is going to create a number of liquidity venues on chain for these things.”

How easily existing DeFi platforms can take advantage remains an open question.

“The SEC’s innovation exemption is a meaningful, directionally bullish signal for DeFi, indicating that the agency is dedicated to determining how tokenization fits into American markets,” said Jim Petrila, chief legal officer of Dromos Labs, the company building Aerodrome and Velodrome.

“In practice, it may prove difficult for fully decentralized or permissionless exchanges to take advantage of the exemption due to the gating requirements, which will require permissioned infrastructure to be built on top of true DeFi,” Petrila said. “The gating requirements, as well as asset approval, may mean that uptake is slow, and the initial scope fairly limited even among centralized venues.”

For now, the SEC is keeping the experiment deliberately narrow. The venues face limits on both the number of stocks they can trade and their share of overall trading volume, and participants must be permissioned.

But the framework gives firms something they have not had before: a defined U.S. route for trading real tokenized stocks on public blockchains. And potentially a plethora of new product types that may need to conform to the new framework.

“I expect over the coming weeks, months we’ll see issuers rethink products to conform with these rules,” Robert Leshner, CEO of Superstate, which offers issuer-sponsored tokenization.

“New products will be designed and launched.”

CoinDesk is holding its annual Policy and Regulation summit on Sept. 22 in Washington, D.C., featuring SEC Crypto Task Force Chief Counsel Taylor Lindman. Register here.